A rally in the shares of banking companies saw the equity markets break out from a lacklustre session post-noon to close on a strong note on Wednesday.
The Sensex gained 1.42 per cent to close at 14,127.31 points, the wider Nifty of the National Stock Exchange ended firmer by 1.23 per cent.
“There was good stock-specific buying today. In the short term, the Sensex may be capped at 14600-levels,” said Suresh Paramar of Darashaw Broking.
Analysts expect the markets to keep up the momentum in the weeks to come and the indices to climb newer peaks.
“Most institutions were on the buy side on Wednesday. We expect the markets to carry on the strength. We think going forward the Sensex could trade in the range of 15,500-16,000,” says Sachin Neema, head of research of India Infoline.
The rally in shares of State Bank of India after it received government nod to cut down stakes in subsidiaries, influenced other bank stocks as well.
While SBI shares closed higher by 4.71 per cent, those of Oriental Bank registered the biggest gain in the banking basket, up 6.32 per cent at Rs 220.40.
Major gainers in the Sensex besides SBI were ICICI Bank (up 3.61 per cent at Rs 919.10), Reliance Communication (up 3.25 per cent at Rs 490.75), BHEL (up 3.02 per cent at Rs 2,595) and Tata Motors (up 2.84 per cent).