The BSE Sensex ended 172 points higher while the NSE benchmark Nifty settled above the 9,100 mark on Tuesday as banking shares rallied. Recovery in other Asian share and a positive opening in European markets also supported sentiments on Dalal Street.
However, analysts believe that gains are likely to be capped in the near term.
“Markets are waiting for the results season. Structurally, we have got most of the reforms getting in place and things are positive on the political front. Only concern is higher valuation levels. That makes the upcoming earnings all the more crucial,” said Siddharth Sedani, vice president, equity advisory at Anand Rathi.
Sector-wise, banking was the biggest contributor to the gains in the benchmark indices as the banking sub-index-Nifty Bank-rose 0.80 per cent led by gains in Axis Bank, HDFC, ICICI Bank and SBI.
Auto, IT and pharma stocks were the other prominent gainers in the markets today with their respective sectoral indices gaining between 0.5-0.8 per cent.