The Nifty was up nearly 100 points at 7,571 while Sensex rose over 300 points to 25,344.
On May 16, Sensex and Nifty hit new highs of 25,375 and 7,563 respectively during the day but closed below that level on profit-taking.
Gautam Shah, Senior Vice President & Technical Analyst at JM Financial Services, says if Nifty breaks the 7,350 support level, it could see a 5-7 per cent correction. He advises investors to buy around 7000 levels.
Indian markets are on a roll on hopes that the Modi-led government would take quick decision to put the economy back on track. The Nifty is up nearly 28 per cent since September 13, when Mr Modi was named as the BJP’s prime ministerial candidate.
The first test of the government’s intentions would be the budget, which is likely to be announced in early July.
“There are no visible near-term negatives. Investors are building portfolios ahead of the union budget, which would be the next big event. FIIs (foreign institutional investors) continue to support. The undercurrent is still positive,” said Suresh Parmar, head of institutional equities at KJMC Capital Markets.
Indian stock markets have been supported by heavy overseas buying. According to Deutsche Bank, India has received an impressive $8 billion in equities and $7.7 billion in debt year-to-date. Foreign portfolio investors bought Indian shares worth Rs. 1,369 crore on Thursday.
Positive global cues have also sentiments on the Dalal Street, analysts say.
Upstream oil and gas companies led the gains today, with Oil and Natural Gas Corp rising over 7 per cent and Reliance Industries advancing nearly 3 per cent.