The BSE Sensex and Nifty gained on Wednesday for the sixth time in seven sessions on hopes the government will muster a majority in parliament on a crucial vote to allow foreign direct investment in multi-brand retail later in the day.
Shares in organised retailers such as Pantaloon Retail India Ltd and Shoppers Stop rallied on hopes of a favourable vote for the government.
Traders said optimism ahead of the parliament vote, that will pay the way for more reforms, have triggered a rally in mid-cap and small cap indexes and is a sign of structural bullishness in the market.
“Markets remained cautiously optimistic before the eve of the event in the Parliament,” said Kaushik Dani, a fund manager at Peerless Mutual Fund.
“Sentimentally, a lot of things are leaning towards what is going to happen today.”
The Sensex gained 0.23 per cent, or 43.74 points, to end at 19,391.86, its highest close since April 27, 2011.
The broader Nifty rose 0.19 per cent, or 11.25 points, to end at 5,900.50 for the first time since April 13 2011, clearing the psychologically important 5,900 level. Shoppers Stop rose 7.53 per cent, closing at Rs 464.70, its highest since July 25, 2011, while Pantaloon Retail gained 3.26 per cent to end at Rs 237.65, its highest close since September 22, 2011.
State Bank of India rose 1.44 per cent after a senior executive told reporters that the Indian government is looking to infuse Rs 4,000 crore in the bank.
Other state-run banks that gained were Punjab National Bank, which rose 3.42 per cent and Bank of India, which ended up 2.3 per cent.