Investors cheered market-friendly reforms as the cabinet gave the go-ahead today to hike FDI in insurance sector to 49 per cent, paving the way for inflow of Rs 25,000 crore in the sector, besides yesterday's RBI decision to increase the FII limit by USD 5 billion.
Market players already bullish due to promising results were encouraged by higher Asian cues supported by strong Chinese manufacturing data.
Earlier, the bourses mostly traded in the red, witnessing profit-booking in recent shares which outperformed.
Buying was seen in FMCG, banking, infotech and metal counters, while counters of energy, auto, mid-cap and small-cap counters saw selling.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 652.40 crore yesterday, as per the provisional data from stock exchanges.
The Nifty traded between a high of 7,835.65 and a low of 7,771.65 points before closing at 7,830.60, up 34.85 points, or 0.45 per cent, from its previous close.
Major gainers were Bank of Baroda (3.41 per cent), Asian Paints (2.78 per cent), HCL Tech (2.62 per cent), Tata Steel (2.44 per cent) and Hindalco (2.19 per cent).
However, losers were Cairn (6.67 per cent), GAIL (1.89 per cent), PowerGrid (1.21 per cent) and Dr Reddys (1.09 per cent).
Turnover in the cash segment declined to Rs 15,780.14 crore from Rs 16,186.88 crore yesterday. A total of 8,412.39 lakh shares changed hands in 71,15,623 trades, while total market capitalisation stood at Rs 89,53,982 crore.