The BSE benchmark index, which had gained a mere 2 points in yesterday's trade, moved up further by 79.71 points to close at 17,185.01. The 30-share Sensex traded in a 167-point range on alternate bouts of buying and selling.
Smart rise in Bajaj Auto, Tata Power, Jindal Steel, Maruti, L&T, ICICI Bank, Bhel, Coal India, Tata Steel, Hero MotoCorp and TCS mainly supported the rise in the index while fall in Tata Motors, RIL, Dr. Reddy's Lab and State Bank of India capped the rise.
Similarly, the 50-share NSE Nifty index snapped a five-day losing streak by rising 23.45 points to 5,216.30.
Besides a higher opening on the European markets on June unemployment rate in the UK unexpectedly ticking down, hopes that Indian government will accelerate economic reforms after the Presidential elections also helped the mood, brokers said.
However, deficient rains in the country so far have forced market participants to adopt a cautious approach, they added.
After easing of wholesale inflation, data today showed retail inflation barely declined to 10.02 per cent in June.
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"...Movements clearly indicate indecision in the market due to upcoming events like the Presidential poll tomorrow, RBI policy on July 31 as well as corporate earnings," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
Dealers said buying was seen in small-cap and mid-cap stocks on signs of improvement in confidence. Total market breadth turned slightly positive as 1,404 counters concluded with gains while 1,374 scrips ended with losses.
Meanwhile, rupee was trading at 55.4 levels to a dollar after resuming at 55 levels today.
Asian markets in Japan, Hong Kong, Taiwan and South Korea were down after China's Premier Wen Jiabao yesterday warned of a severe job outlook for the economy. (MORE)