The BSE benchmark index Sensex rose further by 46 points on sustained buying by funds in bluechips led by banks ahead of the RBI monetary policy meet amid a firming global trend.
The 30-share index, which had gained 142 poins in the previous session, advanced by 46.07 points, or 0.22 per cent, to close at 21,251.12 points. It touched a day's high of 21,302.52 points.
The broad-based National Stock Exchange index Nifty rose by 9.85 points, or 0.16 per cent, to 6,313.80 points.
Brokers said market sentiment improved after government decided to sell stake in Hindustan Zinc which might narrow down budget deficit.
Shares of Hindustan Zinc rose 0.15 per cent to Rs 135.20 after the Cabinet Committee on Economic Affairs approved the sale of the government's residual stake.
They said the upsurge was backed by banking and interest rate sensitive stocks on expectations that RBI may keep its policy rates unchanged in its review meeting on January 28 as headline inflation has receded.
A firming trend in global stock markets also influenced the market sentiment to some extent, they added.
Among 30 Sensex components, 15 stocks closed with gains.
The banking sector index gained the most rising by 1.55 per cent to 12,769.51, followed by the auto index which rose by 1.03 per cent to 12,239.74. Metal index rose by 0.77 per cent to 9,732.54 and capital goods index by 0.64 per cent to 9,761.91.
Published 21 January 2014, 05:08 IST