Power, capital goods, PSUs, banking, consumer durables, healthcare, metals, auto and IT led the rally on expectations of strong reforms in these sectors in the next week's Budget.
After a higher start, the 30-share BSE index rallied to to touch intra-day high of 25,460.96 before settling at nearly two-week high of 25,413.78, clocking a rise of 313.86 points, or 1.25 per cent. Of 30 Sensex scrips, 24 scrips rose.
The gauge had gained 37.25 points on Friday.
For the quarter ended June 30, the Sensex rose 3,027.51 points or 13.5 per cent on the back of robust inflows as the BJP government stormed to power at the Centre after polls.
The BSE index gained about 1,196 points in June month.
Brokers said besides easing global crude oil prices as fears of supply disruption from Iraq receded, expectations that the reform measures in the next week's Union Budget will boost the country's economic growth, bolstered sentiments.
"Volatility and profit booking is visible ahead of upcoming Budget for 2014-15," said Rakesh Goyal,Senior Vice President,Bonanza Portfolio.
The 50-share Nifty of the National Stock Exchange reclaimed the crucial 7,600 mark by rising 102.55 points, or 1.37 per cent, to close at 7,611.35. It touched a high of 7,623.65 and a low of 7,531.60.
Global oil prices eased on softer US demand, traders say.
US benchmark West Texas Intermediate for August delivery fell 26 cents to USD 105.48 and Brent crude eased 22 cents to USD 113.08 per barrel.
Stocks of state-run oil companies saw good activity. BPCL climbed 5 per cent, HPCL gained 4.7 per cent, IOC was up 3.7 per cent and GAIL rose 1.4 per cent. The ONGC counter finished over 3 per cent higher.
Stocks of power and capital goods were among top gainers.
Buying in small-cap and mid-cap shares among investors helped prop up the market, brokers said.
Shrikant Chouhan, Head- Technical Research, Kotak Securities: The market opened on a flat note but quickly moved to 7600/25500 levels under the leadership of PSU banks, Capital Goods and Infra stocks. Even select pharmaceuticals and technology stocks did well on the back of performances of last few days. We are of the view that sustenance above 25300/25270 (7550) will lift the market beyond all time highest levels 25750/7700. In case if indices falls to given supports then one can add long positions to the trading portfolio with a medium to long term view. India VIX is trading at 17.85 and historically we have seen range of it between 15 and 25. Based on this, we would like to advice out of money straddle strategy till the announcement of the budget as the event will increase the volatility on any of the either side that should help option traders. Buy PSU banks at each major supports. Indian currency remained almost unchanged around 60.10 and ease at middle- east will help to appreciate in the near term. It has resistance at 59.75 and support at 60.60. above 60.60 it may weaken to 61 levels quickly.
India's BSE gains 1.25 percent, posts best quarter since Sept 2009
(Reuters) India's benchmark BSE index rose 1.25 percent on Monday as investors bought shares in recent outperformers such as State Bank of India, allowing the broader index to post its best quarterly gain since July-September 2009.
The BSE rose 13.52 percent in the quarter concluded on Monday, making it the best performer in Asia-Pacific, in a rally spurred by hopes the election of Narendra Modi as India's prime minister would spur a period of economic reforms. Modi swept to power in May and the index rose to a record high on June 11.
Sectors expected to especially benefit from reforms such as banks led the gains. State Bank of India, the country's largest lender, rose 40 percent for the quarter.
Foreign institutional investors have been the backbone of the rally, buying shares worth a net $6.27 billion.
Whether these gains can sustain will now depend on whether Modi can deliver, starting with the government's maiden budget to be unveiled on July 10.
"We believe markets will consolidate at these levels and are preparing for the budget. Expectations are much higher and we may see the right soundbites from the government. We may see some consolidation, but are bullish for the near term," said Samir Gilani, head of sales trading and derivatives at IDFC Securities.
The broader NSE index rose 1.37 percent to end at 7,611.35 points. It notched up a gain of 5.3 percent for the month and 13.53 percent for the quarter.
The benchmark BSE index closed 1.25 percent higher at 25,413.78, with a monthly gain of 4.9 percent.
Outperformers during the quarter led the gains on Monday in what traders described as window dressing, or the buying of shares of top gainers to boost portfolio returns.
Banks, among the top gainers, rose on Monday with State Bank of India rising 1.79 percent, and ICICI Bank Ltd closing 2.42 percent higher.
Power and capital goods stocks, which are widely expected to benefit from reforms in the upcoming budget, also gained. Tata Power Co Ltd closed 3.9 percent higher, while Jaiprakash Power Ventures Ltd gained 8.6 percent.
Larsen and Toubro rose 2.1 percent, while Bharat Heavy Electricals Ltd closed 2.4 percent higher.
Other shares benefited from expectations they may be partly privatised, including Coal India Ltd, which gained 1.1 percent.
Shares of state-run oil marketing companies have also gained after crude oil prices cooled down. Bharat Petroleum Corp closed up 5.4 percent, Hindustan Petroleum Corp gained 4.8 percent, while Indian Oil Corp rose 3.6 percent.