Equities climbed 0.1 per cent on Tuesday, taking gains over two days to 17.5 per cent, on hopes a stable coalition government would lead to privatisations, financial sector reforms and more infrastructure spending.
Trading was choppy through the session as investors took profits, but analysts said the near-term outlook was upbeat with many funds that had missed the rally waiting to jump in.
Prime Minister-elect Manmohan Singh vowed on Tuesday to revive growth and spread the benefits of economic expansion that swept his coalition back to power with a decisive mandate in a general election.
The two-day percentage rise was the biggest since a 25.9 per cent jump in March 1992 after Singh, who was then finance minister, unveiled a reform budget that opened the economy to foreigners.
State Bank of India and explorer ONGC extended the previous day's sharp gains as traders bet the Congress party-led coalition may sell holdings in state companies to help fund spending plans and plug a large budget deficit.
Larsen & Toubro was a major gainer, adding 8.8 per cent to Monday's 25 per cent jump, as investors expected the leading engineering conglomerate to benefit from a government drive to update the country's creaking infrastructure.
However, outsourcers such as Infosys Technologies and Wipro that depend on exports for more than half their revenue fell as a jump in the rupee's value against the dollar was seen affecting their profitability.
The 30-share BSE index, or Sensex, rose 0.12 per cent, or 17.82 points, to 14,302.03, its highest close in more than eight months. The benchmark swung widely, rising as much as 4.5 per cent and falling 3.1 per cent at one stage.
"It is very important that some caution set in today," said Hitesh Agrawal, head of research at Angel Stock Broking.
"Yesterday was just an act of desperation as domestic and foreign funds had to catch up to the recent rally."
Eighteen index stocks advanced, while in the broader section, gainers led losers in the ratio of more than 2.5:1 on heavy volume of 906.9 million shares.
On Monday, trading was restricted to just a few seconds after the benchmark jumped 17.3 per cent, its biggest rise in almost two decades, triggered circuit breakers and shut down the market. Volume was paltry at about 13 million shares.
The index has gained 77.7 per cent from 2009 lows in early March as foreign funds moved $4 billion into the market over the past two months
Trading was choppy through the session as investors took profits, but analysts said the near-term outlook was upbeat with many funds that had missed the rally waiting to jump in.
Prime Minister-elect Manmohan Singh vowed on Tuesday to revive growth and spread the benefits of economic expansion that swept his coalition back to power with a decisive mandate in a general election.
The two-day percentage rise was the biggest since a 25.9 per cent jump in March 1992 after Singh, who was then finance minister, unveiled a reform budget that opened the economy to foreigners.
State Bank of India and explorer ONGC extended the previous day's sharp gains as traders bet the Congress party-led coalition may sell holdings in state companies to help fund spending plans and plug a large budget deficit.
Larsen & Toubro was a major gainer, adding 8.8 per cent to Monday's 25 per cent jump, as investors expected the leading engineering conglomerate to benefit from a government drive to update the country's creaking infrastructure.
However, outsourcers such as Infosys Technologies and Wipro that depend on exports for more than half their revenue fell as a jump in the rupee's value against the dollar was seen affecting their profitability.
The 30-share BSE index, or Sensex, rose 0.12 per cent, or 17.82 points, to 14,302.03, its highest close in more than eight months. The benchmark swung widely, rising as much as 4.5 per cent and falling 3.1 per cent at one stage.
"It is very important that some caution set in today," said Hitesh Agrawal, head of research at Angel Stock Broking.
"Yesterday was just an act of desperation as domestic and foreign funds had to catch up to the recent rally."
Eighteen index stocks advanced, while in the broader section, gainers led losers in the ratio of more than 2.5:1 on heavy volume of 906.9 million shares.
On Monday, trading was restricted to just a few seconds after the benchmark jumped 17.3 per cent, its biggest rise in almost two decades, triggered circuit breakers and shut down the market. Volume was paltry at about 13 million shares.
The index has gained 77.7 per cent from 2009 lows in early March as foreign funds moved $4 billion into the market over the past two months
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