Consequently, key indices made gains during the late-afternoon trade session, as healthy buying was witnessed in stocks of oil and gas, automobile, capital goods and banking sectors.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged higher by 46.55 points or 0.59 percent, at 7,907.30 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,756.14 points, traded at 25,821.72 points (at 3.00 p.m.) — up 168.49 points or 0.66 percent from the previous close at 25,653.23 points.
The Sensex has so far touched a high of 25,927.31 points and a low of 25,741.19 points during the intra-day trade.
The BSE market breadth favoured the bulls with 1,300 advances and 1,220 declines.
Both the key Indian indices had ended on a higher note during the previous trade session on Monday, as value buying and expectations of further economic reforms lifted prices.
The barometer index had gained 163.66 points or 0.64 percent, while the NSE Nifty had risen by 45.89 points or 0.59 percent.
Broader markets also gained in line with the headline indices.
Initially, the key indices opened on a positive note on Tuesday, in sync with their Asian peers and a positive close to the US exchanges on Monday.
The Asian and domestic equity markets rose after oil prices surged due to supply side constraints.
Besides, expectations of healthy quarterly results supported the upward movement.
However, investors were seen cautious, given the recent negative macro-economic data and poor quarterly results from state-owned banks.
Key economic indicators have shown a rise in inflation trend that has reduced the chances of the Reserve Bank of India (RBI) further easing its key lending rates during the monetary policy review scheduled for June.
In addition, the risk-taking appetite of investors was subdued a day ahead of the US Federal Open Market Committee (FOMC) releasing its minutes.
The US FOMC minutes assume significance as they can give vital cues on the future course of US interest rates.
A hike in interest rates is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
“Higher crude oil prices due to supply side disruptions lifted global and domestic indices,” Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.
According to Nitasha Shankar, senior vice president for research with YES Securities, the bank index turned in the green led by buying in private sector banks.
“PSU banks continued to witness selling pressure, trading with a cut of one percent,” Shankar noted.
“Reality, media and financial service sectorial indices are trading with handsome gains.”