Reuters Market Eye - Shares gain for a second day, with the Sensex gaining 1 percent and the 50-share Nifty up 1.1 percent, crossing the psychologically important level of 5,600 for the first time since April 11.
The sharp declines in crude and gold prices are expected to help narrow India's current account deficit, dealers said.
Slowing wholesale price inflation could also spur the RBI to cut interest rates at its policy review on May 3, dealers add.
Mortgage lender Housing Development Finance Corp Ltd gains 2.7 percent, while ICICI Bank Ltd is up 1.7 percent.
Indian oil marketing companies such as Hindustan Petroleum Corp Ltd gain for a second day on hopes a slump in crude prices would lower the cost of under-recoveries.
Hindustan Petroleum Corp gains 1.4 percent, Bharat Petroleum Corp Ltd is up 1.7 percent, while Indian Oil Corp Ltd rises 1.5 percent.
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Shares of Tata Power Co Ltd gain 3.7 percent after India's central electricity regulator allowed the company to raise electricity tariffs on a temporary basis at its Mundra power plant in western India.
(Reporting by Abhishek Vishnoi)