The BSE benchmark index Sensex rose further by 46 points on Tuesday on sustained buying by funds in bluechips led by banks ahead of the RBI monetary policy meet amid a firming global trend.
The 30-share index, which had gained 142 poins in the previous session, advanced by 46.07 points, or 0.22%, to close at 21,251.12 points. It touched a day's high of 21,302.52 points.
The broad-based National Stock Exchange index Nifty rose by 9.85 points, or 0.16%, to 6,313.80 points.
Brokers said market sentiment improved after government decided to sell stake in Hindustan Zinc which might narrow down budget deficit.
Shares of Hindustan Zinc rose 0.15% to Rs 135.20 after the Cabinet Committee on Economic Affairs approved the sale of the government's residual stake.
They said the upsurge was backed by banking and interest rate sensitive stocks on expectations that RBI may keep its policy rates unchanged in its review meeting on January 28 as headline inflation has receded.
A firming trend in global stock markets also influenced the market sentiment to some extent, they added.
Among 30 Sensex components, 15 stocks closed with gains.
The banking sector index gained the most rising by 1.55% to 12,769.51, followed by the auto index which rose by 1.03% to 12,239.74. Metal index rose by 0.77% to 9,732.54 and capital goods index by 0.64 % to 9,761.91.