Rate cut hopes and short-covering ahead of Thursday's monthly expiry of derivative contracts boosted buying. Positive cues from global markets and lower crude oil price also provided support, traders said.

If you plan to sell a stock because it has risen sharply in the last few months, wait. The decision should be based on whether the company has a good business model.

Expectations of encouraging economic data like inflation for October, IIP data for September, to be released after market hours on Wednesday, buoyed trading sentiments.

Besides, hopes of further economic reforms by Modi government, rising rate cut expectations and fall in international oil price too buoyed sentiments, said brokers.

Stocks of IT companies that get more than 60 per cent of their revenue from the US led rebound on the exchanges as buying intensified.

Sectorally, the BSE Realty sector index suffered the most by losing 3.42 per cent, followed by Power down 3.26 per cent, Capital Goods 2.70 per cent and Oil & Gas 2.67 per cent.

Overall, 25 Sensex stocks declined while five led by Cipla, Dr Reddy's, HDFC Bank, Hero MotoCorp and Infosys rose.

The 30-share BSE index resumed higher and moved side-ways in a range of over 100 points before ending at 27,061.04 - a rise of 65.17 points.

Brokers said sentiment was weak on reports of foreign institutional investors (FIIs) and domestic institutional investors turning sellers.

Oil & Gas shares were at the forefront after fall in global crude oil prices after subdued US jobs data fuelled demand concerns and a cease-fire between Russia and Ukraine.

In their place, Arvind, JustDial and L&T Finance Holdings will be included in the index, according to the changes announced by India Index Services & Products (IISL), a subsidiary of NSE Strategic Investment Corporation.

The 30-share Sensex opened on a strong footing and rose quickly to new intra-day high of 26,530.67 points as buying momentum picked up. It settled for the day at 26,420.67, a new record at closing, by gaining 29.71 points or 0.11 per cent.

Expectations the government is prepared to tackle any crisis related to poor rains and strong global cues after better-than-expected US data and easing oil prices also boosted sentiment, traders said.

\"The participants responded positively to the statement made by the Finance Minister that the government would take bold decisions in the forthcoming Budget (July 10) to revive the economy,\" said Jayant Manglik, President-retail distribution, Religare Securities.

Both mid-cap and small-cap companies show pronounced cyclicality. Their earnings fall much more in a down cycle and rise much faster than that of the larger companies when the cycle turns.

Brokers attributed nearly stable market to rolling over positions in the futures and options (F&O) segment from May series to June before expiry of derivatives contract on Thursday.

Money Today thought the current market swings are a good time to revisit the basics of mutual fund investing, lessons that have stood their followers in good stead over any number of market ups and downs.

Markets are cheering the ascendancy of Narendra Modi and announcement of a market friendly Cabinet could act as a greater catalyst.

Investment by foreign institutional investors (FIIs) has been quite robust and the rally, which began in December 2013, when results for the Assembly elections were declared, is still on.

One big reason for investing in a small-cap stock is that most investors are on the lookout for the next great growth company such as Infosys during its early years. Small-cap stocks can give huge returns. But investors must not lose sight of the risks involved.