Refinery, banking, power, consumer durable shares surged ahead of June IIP data release and a fall in crude oil prices following easing of economical global worries, also boosted the sentiment, brokers said.
The BSE Sensex resumed higher at 25,703.78 and hovered in wide range of 25,904.98 and 25,645.79 before ending the day at 25,880.77, showing a smart gain of 361.53 points of 1.42 per cent. Yesterday, it had risen by 190.10 points.
Today's 361.53-point rise is the Sensex's best daily gain since June 6, 2014 when it zoomed by 376.95 points.
"Markets rose for the second successive day on buying in select heavyweights. Supportive global markets and reduced geo-political concerns helped support the markets. Better-than-expected numbers from companies like Tata Motors supported the sentiment. Going ahead, we expect geo-political issues on the global front and further reform initiatives from the Government on the domestic front, to drive markets. Remaining quarterly results and the progress of monsoons can be the near-term triggers, said Dipen Shah, Head- Private Client Group Research, Kotak Securities.
Shares of Tata Motors closed 6 per cent up after the firm reported over 3-fold jump in June quarter consolidated profit.
"Some of the stocks like Tata Motors, Apollo Hospitals and Oil India gained after posting healthy numbers. Power and pharma stocks were also in limelight. Easing of crude oil prices too boosted market sentiment," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
The NSE 50-share Nifty rose 101.10 points, or 1.33 per cent -- its biggest rise since June 30 -- to end at 7,727.05. Yesterday, it had climbed 57.40 points. It regained the 7,700 mark at close after breaching it last on August 5, 2014.
Markets experts said quarterly profits reported by a majority of big firms today were above estimates.
Sentiments remained up beat as most participants expect further improvement IIP and CPI inflation, which are scheduled for release later today, according to Jayant Manglik, President-retail distribution, Religare Securities.
Asian stocks ended mixed as investors seemed to put aside geopolitical concerns. Key benchmark indices in Hong Kong, Japan and South Korea rose by 0.10-0.20 per cent, while China, Singapore and Taiwan moved down by 0.04-0.14 per cent.
European markets were also trading mixed in their early trade as indices in France and Germany moved down by 0.36 per cent each while the UK's FTSE moved up marginally.
Meanwhile, Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 162.92 crore yesterday, as per provisional data from the stock exchanges.
Jignesh Chaudhary, Head of Research, Veracity Broking Services said: "Local equities today traded strong led by gains in auto, capital goods and oil and gas sectors...while the IIP data is likely to have improved, any rise in inflation may dent the confidence of investors."
In the 30-share Sensex pack, 26 scrips ended higher, three finished lower and Wipro ruled steady.
Major gainers were Gail India (6.02 per cent), Tata Motors (5.92 per cent), HDFC (5.39 per cent), ONGC (3.21 per cent), Sun Pharma (2.69 per cent), NTPC (2.69 per cent), Coal India (1.86 per cent), Cipla (1.84 per cent), L&T (1.79 per cent), HDFC Bank (1.71 per cent), ICICI Bank (1.65 per cent), Tata Steel (1.31 per cent) and Axis Bank (1.26 per cent).
Bharti Airtel fell by 1.67 per cent among the laggards.
Among the S&P BSE sectoral indices, Auto rose by 1.79 per cent, Oil&Gas 1.67 per cent, Bankex 1.41 per cent, Consumer Durables 1.40 per cent, Power 1.30 per cent, Healthcare 1.29 per cent, Capital Goods 1.26 per cent and Realty 1.03 per cent.
The overall market breadth remained positive as 1,555 stocks closed in the green, 1,366 ended in the red while 114 ruled steady. Total turnover rose to Rs 2,339.74 crore from Rs 1,986.11 crore yesterday.
India's BSE index posts biggest daily gain in nearly 10 weeks
(Reuters) India's benchmark BSE index posted on Tuesday its biggest daily gain since June 6, rising for a second straight session, helped by news that Tata Motors Ltd had tripled its quarterly net profit.
The broader NSE index's fall of 3.5 percent since its record high on July 25 until last week was also starting to look overdone, according to some analysts, given continued expectations for an improving domestic economy.
Investors will now keenly await data on India's June industrial production and July consumer prices due after the close of markets for a better indication of the health of the economy.
"The selling pressure has got absorbed and the correction was mostly overdone. I think the overall outlook remains positive, but one should stay stock-specific," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.
The benchmark BSE index rose 1.42 percent to close at 25,880.77, while the NSE index added 1.33 percent to end at 7,727.05.
Among the top gainers, Tata Motors surged 6.2 percent, marking its biggest daily percentage gain since Sept. 10, 2013, when its luxury unit Jaguar Land Rover Ltd (JLR) unveiled a $2.4 billion investment in a new range of cars aimed at the mass market.
On Monday, Tata Motors said April-June net profit more than tripled on the back of strong sales from JLR.
Others gained on earnings optimism. Sun Pharmaceutical Industries Ltd gained 2.7 percent ahead of its quarterly results later in the day.
Tata Steel closed up 1.4 percent ahead of earnings on Wednesday.
Eicher Motors Ltd gained 8.2 percent after April-June quarter earnings beat analyst estimates.
Also getting a lift were Housing Development Finance Corp , which surged 5 percent, while HDFC Bank Ltd rose 1.8 percent on speculation the two may see their weightages increase in a rebalancing of global indexes by index provider MSCI, due by mid-month.
Power and infrastructure stocks also gained on short-covering. Tata Power Co Ltd, which fell more than 5 percent in the past four sessions, rose 0.55 percent, while Larsen and Toubro closed 1.8 percent higher and NTPC Ltd finished up 2.7 percent.
However, Hindustan Petroleum Corp Ltd fell 1 percent after its quarterly net profit lagged estimates.