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The BSE Sensex and Nifty rose to their second consecutive record high on Tuesday as blue-chips such as Tata Motors gained on positive institutional inflows, while oil retailers surged after Brent crude prices hovered near 14-month lows.
The broader Nifty rose as much as 0.56 per cent to 7,918.55, while the benchmark BSE Sensex gained as much as 0.53 per cent to 26,530.67, surpassing their previous all-time highs hit on Monday.
The Modi government's promise of reforms and Reserve Bank of India Governor Raghuram Rajan's inflation target and management of the rupee crisis last August have inspired confidence among foreign investors who have pumped in $12.33 billion in equities so far this year.
Expectations that falling crude oil prices will augur well for importers, and higher global stocks on renewed risk appetite, also helped.
"Foreign investors are supporting the rally. Sentiment is positive but cautious. Markets will trade range-bound for the time being," said Suresh Parmar, head, institutional equities, at KJMC Capital Markets.
The Sensex rose 0.11 per cent, or 29.71 points, to end at 26,420.67, while the Nifty rose 0.3 per cent, or 23.25 points, to end at 7,897.50. Also, both the indexes marked their sixth consecutive day of gains, their longest winning streak since July 24, when they rose for eight sessions.
Blue-chips led the rally, with Tata Motors rising three per cent and Larsen and Toubro ending 1.1 per cent higher.
Mahindra and Mahindra rose 3.6 per cent. ICICI Bank ended up 0.8 per cent.
Shares of Indian loan providers which use gold as collateral surged on relative valuations.
Manappuram Finance surged 20 per cent to its daily limit and its highest level since March 2013, while Muthoot Finance rose 9.4 per cent.
However among stocks that fell, Voltas lost 1.9 per cent on profit-taking after rising 16.8 per cent over the past two sessions till Monday.
