Still, the mild gains on Wednesday, combined with the falls on Tuesday, signal the momentum for a record setting rally is waning, as investors book profits across a number of shares that have recently surged.
A key indicator of whether the rally can sustain was due after market hours, when India is due to post consumer inflation and industrial output data.Easing retail prices would likely cement expectations the Reserve Bank of India would keep interest rates steady at its policy review on April 1 after aggressively tightening monetary policy from September to January.
However, one should be careful in picking stocks.There are enough buying opportunities and at the same time we may see further selling pressure in metals and iron ore stocks."
The Nifty rose 0.08 per cent, or 5 points, to end at 6,516.90, hovering near an all-time high of 6,562.85 hit on Tuesday.
The Sensex edged up 0.14 per cent, or 29.80 points, to end at 21,856.22, not too far from a record high of 22,023.98 hit on Monday.
Foreign investors bought Indian shares worth Rs. 1,471 crore on Tuesday, their 17th buying over the previous 18 sessions for a total of over $1.8 billion.
Exchange data shows foreign investors were net sellers on Monday, although traders say that the day was impacted as investors tendered shares as part of GlaxoSmithKline's open offer to increase its stake in the domestic unit to 75 per cent.
Among the top gainers on Wednesday were recent under-performers.
Sun Pharmaceutical Industries gained 4.14 percent, its biggest single day gain since October 9, 2013, after slumping 7 per cent over the previous four sessions.Dr Reddy's Laboratories rose 0.33 per cent.
Technology stocks, which went from top performers last year to struggling in recent weeks as the rupee recovered, were other strong gainers on Wednesday.
Tata Consultancy Services added 1.29 per cent, but it is still down 4.3 per cent for the month, compared with a 3.8 per cent gain in the Nifty so far in March.Wipro closed 1.23 per cent higher. But investors also continued to book profits in other recent gainers.
Shares in Oil and Natural Gas Corp fell 1.9 per cent on profit-taking after gaining 8.8 percent so far this month.
Metal stocks continued to witness selling pressure for the third consecutive day with Tata steel losing 1.21 per cent on continued concerns about China's growth prospects.Hindalco Industries closed 2.26 per cent down.
Shares of L&T Finance Holdings and Just Dial gained after their inclusion into the futures and option segment of the NSE.