Mumbai: Indian equity indices, BSE Sensex and NSE Nifty50 ended the day with record closing highs after touching fresh intra-day highs on Tuesday, driven by banking, finance and metal stocks, as encouraging data from another COVID-19 vaccine trial bolstered investor sentiment.
A recovering rupee added to the buying momentum, traders said.
After touching its lifetime peak of 44,161.16 during the session, the 30-share BSE Sensex settled 314.73 points or 0.72 per cent higher at its new closing record of 43,952.71.
Similarly, the broader NSE Nifty touched a fresh intra-day high of 12,934.05. It finally finished 93.95 points or 0.74 per cent up at its lifetime peak of 12,874.20.
Tata Steel was the top gainer among the Sensex constituents, surging 6.24 per cent, followed by SBI, HDFC Bank, Bajaj Finance, Axis Bank, L&T, Maruti, IndusInd Bank and HDFC.
On the other hand, NTPC, HCL Tech, ONGC, Infosys, ITC, PowerGrid and Hindustan Unilever were among the major laggards, dropping up to 2.69 per cent.
Wall Street vaulted to lifetime highs in the overnight session after US-based biotechnology giant Moderna said its COVID-19 vaccine candidate was found to be 94.5 per cent effective in Phase 3 trials.
The announcement came just a week after Pfizer and BioNtech said their COVID-19 vaccine was more than 90 per cent effective in preventing COVID-19, based on preliminary data.
"The market hit the all-time high, factoring yesterday's trading holiday, led by banking stocks and investors rejoicing about the news of another vaccine to end the pandemic. This week, global markets started well, however today, it experienced mixed sentiments owing to increase in virus cases and tighter restrictions in the western world.
"Optimism over the development of vaccine is still outweighing concerns over the next wave of COVID. We recommend investors to start considering partial profit booking, on a short-term basis, due to high gaps developing between the actual performance of the economy and the market," said Vinod Nair, Head of Research at Geojit Financial Services.
Sector-wise, BSE industrials index jumped 2.27 per cent, followed by metal, capital goods, finance, bankex and realty. However, oil and gas, healthcare, teck, IT, energy and FMCG closed in the red.
Elsewhere in Asia, bourses in Shanghai and Seoul ended lower, while Hong Kong and Tokyo closed with gains.
Stock exchanges in Europe were trading on a mixed note in early deals.
Meanwhile, international oil benchmark Brent crude was trading 0.25 per cent lower at USD 43.71 per barrel.
In the forex market, the rupee appreciated by 16 paise to end at 74.46 against the US dollar.
Rupee Rises By 16 Paise To 74.46 Against Dollar
On the other hand, as positive news on coronavirus vaccine boosted appeal for riskier assets, the rupee on Tuesday appreciated by 16 paise to settle at 74.46 against the US dollar
Besides, a weak dollar overseas also supported the local unit.
At the interbank forex market, the domestic unit opened strong at 74.43 against the US dollar and later touched a high of 74.38 in day trade.
The local unit finally closed at 74.46 against the US dollar, registering a gain of 16 paise over its previous close. On Friday, the rupee had settled at 74.62 against the US dollar. Forex market was closed on Monday on account of Balipratipada.
Analysts said that dollar purchases by the RBI, however, capped the rupee gains.
"The Indian rupee appreciated against the US Dollar for the second consecutive session amid improved risk appetite in the region supported by news of another potentially effective coronavirus vaccine," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
However, greenback purchases from PSU banks, likely on behalf of the central bank, along with dollar demand from importers offset gains, Iyer added.
US-based biotechnology giant Moderna on Monday announced that its COVID-19 vaccine has shown to be 94.5 per cent effective in preventing the deadly disease, bringing a glimmer of hope to a world ravaged by the coronavirus pandemic.
Cambridge, Massachusetts-based Moderna's announcement comes just a week after Pfizer and BioNtech said their COVID-19 vaccine candidate was found to be more than 90 per cent effective in preventing COVID-19 in participants.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, dropped 0.24 per cent to 92.41.
On the equity front, the 30-share BSE index rallied 314.73 points or 0.72 per cent to close at 43,952.71 and the broader NSE Nifty gained 93.95 points or 0.74 per cent to settle at 12,874.20.
Brent crude futures, the global oil benchmark, rose 0.18 per cent to USD 43.90 per barrel.
According to Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas, Indian rupee appreciated amid weakness in the dollar and rise in risk appetite in the global markets.
"Markets sentiments improved on positive development over coronavirus vaccine. However, sharp gains were prevented on worries over economic recovery due to mounting coronavirus cases across the globe," Mukadam said.
Many countries in Europe and states in the US are tightening COVID-19 restrictions to curb the spread of the pandemic.
"Fund inflow by the FIIs is keeping the rupee higher but at the same time intervention by the RBI is keeping rupee gains capped," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said that the rupee saw some weakness as RBI bought dollar in spot and then undertook sell/buy swap in forward to neutralize rupee liquidity.
The central bank through nationalised banks was seen buying dollar in spot market at around Rs 74.40 mark levels to keep the rupee from appreciating due to inflows into local stocks and weak dollar owing to news of another promising vaccine, Trivedi added.
(Nitesh Kumar Sahoo With PTI Inputs)