The BSE Sensex closed at a record high on Wednesday as telecoms firms such as Bharti Airtel surged after reporting higher margins, while continued foreign inflows boosted sentiment.
The Sensex has now gained 21 per cent since hitting an intraday yearly low of 17,448.71 points on August 28, a period when the rupee was at record lows and the country appeared in the midst of a crisis of confidence.
Yet the subsequent delay in the US Federal Reserve's tapering of its monetary stimulus and signs showing the economy may have bottomed have sparked a revival, and the index, also known as the Sensex, is only 0.8 per cent away from a record high of 21,206.77 points hit on January 10, 2008.
"May was the month in which tapering fears first surfaced and swept the rupee along. We feel that the Fed may not taper at all till February. That means liquidity will continue to flow, charming our markets," said Jyotheesh Kumar, executive vice-president of HDFC Securities.
Trading could turn more volatile on Thursday after the outcome of the US Fed's two-day policy meeting overnight and the expiry of domestic derivatives.
The Sensex rose 0.5 per cent, or 104.96 points, to end at 21,033.97, a record closing high.
The broader Nifty also rose 0.5 per cent, or 30.80 points, to end at 6,251.70, marking its second consecutive day of gains.
Foreign investors were net buyers for an 18th consecutive session on Tuesday, bringing their total buying to nearly Rs 150 billion during that period.
Among telecoms companies, Tata Communications Ltd jumped 10.2 per cent after its July-September operating profit beat expectations, while Bharti Airtel Ltd surged 5.5 per cent after its September-quarter operating margin grew 32 per cent.
Drugmaker Lupin Ltd rose 1.4 per cent after its quarterly consolidated net profit rose nearly 40 per cent, beating analysts estimates.
Dr.Reddy's Laboratories Ltd gained 3.9 per cent after earlier marking its all-time high at 2,544.60 rupees, a day ahead of its July-September earnings.
Havells India Ltd rose 7.3 per cent after the company said quarterly profit rose by 45 per cent to Rs 1.26 billion.
Maruti Suzuki India Ltd ended 0.1 per cent higher, adding to Tuesday's gains of 8.1 per cent, after the country's biggest carmaker said net profit tripled from a year earlier, beating estimates.
Among stocks that fell, shoemaker Bata India Ltd lost 0.8 per cent after its quarterly net profit rose by 17 per cent to Rs 375.9 million, lagging analyst estimates.
Larsen & Toubro Ltd ended 0.6 per cent lower after J.P.Morgan downgraded the stock to "neutral" from "overweight", saying the current share price adequately discounts near-term positives.