Benchmark indices closed at record highs for the second consecutive session as banking stocks rose, buoyed by a rally post SBI's Q1 earnings.
Sensex ended 546 points higher at 54,369 and Nifty climbed 128 points to 16,258. Top Sensex gainers were HDFC, Kotak Bank, ICICI Bank and SBI, rising up to 4.77%.
Titan, Nestle India and Ultratech Cements were among the top Sensex losers, falling up to 2.14%.
Among 30 Sensex stocks, 14 ended in green.
During the day, Sensex logged all-time high of 54,465 and Nifty touched 16,290, a fresh record high.
However, BSE midcap and small cap indices saw profitbooking with the indices ending 244 points and 286 points lower at 23,129 and 26,847, respectively.
Banking stocks were the top sectoral gainers with their BSE index zooming 1,040 points to end at 41,014 against previous close of 39,973.
Bank Nifty ended 820 points higher at 36,028. Market cap of BSE-listed firms stood at Rs 239.52 lakh crore.
Market breadth was negative with 1,137 shares rising against 2,119 falling on BSE. 116 shares were unchanged.
Analysts expect the rally to continue in the short term.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan said, "The overall structure shows that the rally is likely to continue towards the weekly upper Bollinger Band that is 16,400, which will be the short-term target. The daily Bollinger Bands & the short term momentum indicators are in sync with the bullish stance. On the downside, a gap area that got created today on the daily chart that is 16176-16146, will act as an immediate support."
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities said,"Nifty has given breakout of the trading range of 15,500-15,950. An impulsive up-move backed by liquidity has pushed the index towards 16,250 mark and is further expected to gain. We continue to remain positive on the broader markets and suggest buying on dips. For the August series, range is seen at 15900-16600 with a positive bias. Banking and auto stocks are expected to gain momentum while metal stocks could witness profit booking. Mid-cap space is expected to move incremental with pockets of outperformance."
Meanwhile, rupee strengthened against the US currency for the third straight session, closing 9 paise higher at 74.19 amid a rally in domestic equities.
At the interbank forex market, the rupee opened at 74.16 and hit an intra-day high of 74.08 and a low of 74.24. On Tuesday, the rupee had settled at 74.28 against the US dollar.
France's CAC 40 added 0.5% in early trading to 6,757.93 while Germany's DAX was 0.7% higher at 15,658.05. FTSE 100 in Britain picked up 0.3% to 7,128.05.
Kospi in South Korea rose 1.3% to 3,280.38, while the Hang Seng in Hong Kong climbed 0.9% to 26,426.55. The Shanghai Composite index gained 0.9% to 3,477.22.
Sydney's S&P/ASX 200 closed 0.4% higher at 7,503.20. However, Nikkei 225 fell 0.2% to 27,584.08.
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