Shares rose on Monday to their highest close in more than three months, led by top private firm Reliance Industries and Tata Steel Ltd, but technical charts indicated resistance could limit the upside.
The 30-share benchmark BSE index ended up 0.81 per cent, or 115.19 points, at 14,418.60, but 14 of the components lost ground. It was the index's strongest close since February 9, the day it had hit a record high of 14,723.88.
The 50-share NSE index gained 1.1 per cent to a record close of 4,260.90. The index rose as high as 4,269.35, breaching a previous all-time high of 4,245.30 set on February 8.
"On the domestic front there seem to be no worries as such, with the Q4 results being more good than bad, inflation concerns subsiding and interest rates too looking like peaking out," CLSA analysts Sanjay Singh and Nikhil Raina said in a note.
"Apart from any negative surprises from the global front, we don't see too many concerns on the horizon and look forward to a sharp upmove this week."
A technical analysis by Reuters showed the market was overbought and the benchmark index could face resistance at its February 19 high of 14,480, but any downside would find support at 13,921.58 and the mid-April high of 13,763.
Shares in top private firm Reliance Industries rose 3.7 per cent to a third-straight record close. The stock has risen more than 31 percent since April 3, compared with a 14 per cent rise in the benchmark index during the same period.
"There is lot of expection in the market that the company may possibly subdivide its business into separate entities and unlock value," said VK Sharma, head of research at Anagram Stock Broking. "But we have not heard anything of this sort from the company as of yet."
Steel stocks rose after state-run Steel Authority of India reported quarterly results way above analysts' estimates. Top private sector steel maker Tata Steel gained 5.4 per cent to 622.90 rupees, while SAIL closed 4.3 per cent up at 144.85 rupees.
"Both Tata Steel and SAIL have projected robust demand outlook. That is helping the gains," said a steel analyst with a local brokerage.
Shares in software firms headed lower after the rupee rose to a fresh nine-year high against the dollar. The export-focused firms get more than 60 per cent of their revenue in dollars and a rising rupee could hurt their profit.
Top software exporter Tata Consultancy ended 1.2 per cent down at 1,236.95 rupees, while second-ranked Infosys slid 1.1 per cent to 1,960.90 rupees.
TOP THREE BY VOLUME
* Reliance Energy on 14.2 million shares.
* Tata Teleservices (Maharashtra) Ltd. on 11.3 million shares
* Reliance Natural Resources on 10.5 million shares