The markets rose for a fourth straight session on Wednesday to close at its highest in more than a month as ITC Ltd rose on heavy buying by foreign investors despite expectations of volatility due to derivatives expiry.
Overseas investors have been net buyers of cash shares in each of the previous nine sessions, with inflows totalling $533.2 million, exchange and regulatory data showed.
Also boosting sentiment was foreign buying of index futures and options on Tuesday, worth Rs. 2,151 crore, a rare event one day ahead of the expiry of derivative contracts.
Traders will continue to monitor moves in other regional markets for near-term direction, ahead of December-quarter economic growth data due to be released after market close on Friday.
FIIs flows are driving the market and may even overshadow GDP data. We are positive about the market for the month of March and are seeing a pre-election rally taking shape.India's economic growth likely slowed to a near decade-low of 4.9 per cent at the end of last year as high interest rates hit factory activity.
The benchmark BSE Sensex rose 0.65 per cent, or 134.52 points, to end at 20,986.99.The broader Nifty rose 0.62 per cent, or 38.75 points, to end at 6,238.80. It closed above the psychologically important 6,200 level for the second day.Both the indexes marked their highest close since January 24 for a third consecutive day.
India's National Stock Exchange on Wednesday launched trading of futures tied to its VIX volatility index, known as the "fear gauge," providing a key hedging tool against uncertainty ahead of general elections and weaker global market sentiment.Trading was active with Rs. 325 crore worth of turnover, the NSE website showed.
ITC rose 2.1 per cent, while Sun Pharmaceutical Industries gained 1.5 per cent.Among other stocks, HDFC Bank rose 0.9 per cent, while Mahindra and Mahindra ended 2.2 per cent higher.
The NSE IT. index ended 0.37 per cent higher after earlier marking its all-time high at 10,212.60, rising for a second straight day on continued optimism about US business outlook.Wipro gained 1.1 per cent, while Infosys rose 0.7 per cent.
Dr. Reddy's Laboratories rose 2.3 per cent after earlier marking its record high of Rs. 2,849.40 on growing hopes about its US business. The drugmaker also said late on Tuesday it launched Sumatriptan injection, used to treat migraine, for U.S. markets.
However, L&T Finance Holdings fell 2.8 per cent on profit-taking after gaining 3.9 per cent on Tuesday on expectations it was a leading contender for a banking licence.
The markets in India will remain closed on Thursday for a local holiday.