Indices continue record-setting streak

The BSE Sensex hit record highs for a third straight session on Wednesday, as blue-chips such as Larsen & Toubro extended recent gains bolstered by buying from foreign investors, on hopes of a recovery in the domestic economy.

Investors say the Reserve Bank of India's policy review on Monday, where it is widely expected to keeps rates unchanged, and general elections due by May would act as the next key catalysts for markets.

Foreign investors have helped underpin gains, with net purchases in shares reaching $2.53 billion so far this month, according to regulatory data.

Whether Indian equities can sustain the record-setting rally this month is becoming a big source of debate in markets with bull and bears making very persuasive arguments.

Also, some volatility is expected on the triple-witching Thursday which marks the expiry of March equity derivative contracts for India. "Things are improving, macro economic turnaround is underway, pre-election wave can drive market to even higher levels but I will watch global markets, US short-term rates from here onwards," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

The Nifty rose as much as 0.57 per cent to an all-time high of 6,627.45, while the benchmark Sensex gained 0.53 per cent to a lifetime high of 22,172.20. Both the indexes ended 0.18 per cent higher each.

Among blue chips, Larsen & Toubro rose 2.2 per cent, while Tata Motors ended higher 2.8 percent. Metals and capital goods stocks led gains, with the BSE metal index up 2.2 per cent on hopes for economic stimulus in China, which might result in higher international metal prices, traders said.