The Sensex rose in afternoon trade amid mixed Asian stocks and reduced worries over the prospect of a long-term capital gains tax on sale of listed securities after FM Arun Jaitley sought to allay fears with his statement on the tax front.
While Sensex rose 212 points or 0.82 percent to 26,019 level, Nifty was up 65 points or 0.82 percent to 7,973 level.
This is the second session in which the market has entered green territory during the last 9 consecutive trading days.
On the Sensex, 25 stocks were trading in green with ITC (2.62 percent) and Lupin (2 percent) logging maximum gains.
GAIL at 1.27 percent was the top loser.
Sensex traded in a range of 25,803 to 26029 levels.
Nifty was trading below the crucial 8,000 level it breached on December 22, 2016.
Bharat Financial Inclusion (5.20 percent) and Alok Textiles 4.33 percent were the top gainers.
Market breadth was positive with 1484 stocks rising against 902 falling on the BSE.
The BSE consumer durables index rose 177 points or 1.66 percent to 10,905 level. Consumer durable stocks were the maximum contributors to Sensex's gains.
Tokyo's Nikkei 225 was nearly flat at 19,407.77 and the Kospi of South Korea rose 0.2 percent to 2,041.66. The Shanghai Composite index was nearly flat at 3,121.67. Markets in Southeast Asia were mixed. Hong Kong and Australia were closed for Boxing Day.
The Dow Jones industrial average picked up 14.93 points, or 0.1 percent, to 19,933.81. The Standard & Poor's 500 index gained 2.83 points, or 0.1 percent, to 2,263.79. The Nasdaq composite rose 15.27 points, or 0.3 percent, to 5,462.69. By midday Tuesday in Asia, Dow futures were down 0.05 percent and S&P futures shed 0.03 percent.