The 30-share index resumed on a positive note at 26,815.41 and climbed to intra-day high of 26,983.48 as investors indulged in cornering recently beaten-down stocks.
However, it shed some gains on emergence of profit-booking towards the fag-end as participants turned cautious ahead of outcome of the US Federal meet later in the day and settled at 26,832.66, up 146.15 points or 0.55 per cent.
"...The concerns over below normal monsoons have been suppressed now, in which place, an above normal rainfall, albeit only for the period till 15 June is now helping market sentiments," said Anand James, Co Head Technical Research Desk, Geojit BNP Paribas.
Brokers said sentiments remained upbeat as monsoon rains have been above-normal till now and the country's trade deficit narrowed to a three-month low in May.
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Despite ongoing winning-run, foreign investors have been net sellers on the bourses in the past few sessions. They sold shares worth Rs 521.65 crore yesterday.
Sectorally, consumer durables rose the most by surging 2.26 per cent, followed by healthcare 1.62 per cent, FMCG 1.46 per cent, capital goods 1.11 per cent, auto 0.81 per cent, metal 0.78 per cent and oil&gas 0.46 per cent.
Midcap index rose 1.44 per cent and small-cap index gained 1.33 per cent.
Asian stocks closed mixed while European markets were trading lower amid unsuccessful Greek debt talks and the outcome of a two-day Federal Reserve policy meeting of the Federal Open Market Committee (FOMC) late today for further information of the timing of an expected rate hike by the US.