The BSE Sensex rose for a second consecutive session on Wednesday with TCS hitting a record high after an industry body forecast software exports would grow in the next fiscal year, while Tata Motors gained after key unit JLR reported a surge in monthly sales.
The gains mark a recovery from an eight-session losing streak that had sent the benchmark BSE Sensex to its lowest level since December 31, 2012.
Still, caution remains, with attention shifting to January wholesale price data on Thursday, after the Reserve Bank of India (RBI) sparked concerns about future interest rate cuts with a cautious statement on monetary policy last month.
Although the wholesale inflation index is expected to ease to a three-year low of 7 percent, that would still remain well above the RBI's perceived comfort zone of around 5 percent.
Markets could also be range-bound ahead of the 2013/14 budget, to be unveiled on February 28, which will be critical in determining the government's fiscal discipline.
"I think inflation data will be important, but the relevance of it may be overshadowed by expectations ahead of the budget," said Jagannadham Thunuguntla, Head of Research, SMC Investments and Advisors Limited.
The RBI will not just take WPI inflation, but will also consider other factors in its March meeting, added Thunuguntla.
0.24 percent, or 47.04 points, to end at 19,608.08, marking its highest close in a week.
The broader Nifty rose 0.18 percent, or 10.45 points, to end at 5,932.95, closing above the psychologically important 5,900 level for a second day.
Tata Consultancy Services Ltd
The gains come a day after industry body, National Association of Software and Services Companies (Nasscom), forecast exports from the software services sector will grow 12-14 percent in 2013/14 to as much as $87 billion.
Shares in Tata Motors
Oil and Natural Gas Corp
Shares in Motherson Sumi Systems Ltd
Among decliners, State Bank of India
Shares in Tata Steel Ltd
The company after market hours reported a net loss of 7.63 billion rupees.