The benchmark Sensex on Tuesday closed at a nearly two-week high of 19,635, up 135 points, or 0.7%, as positive signals of economic recovery in Europe, India’s biggest software market, influenced market sentiments.

The Nifty of the National Stock Exchange also rose by 42 points, 0.7%, at 5,940.

Shares have recovered after hitting yearly lows on Friday, although the mood remains largely cautious ahead of Budget 2013-14, to be unveiled on February 28.

IT stocks were in the limelight with Infosys, Tata Consultancy Services and Wipro gaining in 1.2-1.9% on heavy buying.

“Market broke out from the trading range on account of lack of selling, which triggered short covering in the indices,” said Amar Ambani, research head, IIFL.

“The current up move is likely to intensify further after Nifty takes out the intermediate high of 5,969.”