Sensex, Nifty continue record-setting streak; blue chips advance

By Abhishek Vishnoi

MUMBAI (Reuters) - 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 April 1, where it is widely expected to keeps rates unchanged, and general elections due by May would act as the next key catalysts for markets.

Overseas 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, U.S. 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 percent to an all-time high of 6,627.45, while the benchmark Sensex gained 0.53 percent to a lifetime high of 22,172.20.

Both the indexes ended 0.18 percent higher each.

Among blue chips, Larsen & Toubro rose 2.2 percent, while Tata Motors ended higher 2.8 percent.

Metals and capital goods stocks led gains, with the BSE metal index up 2.2 percent on hopes for economic stimulus in China, which may result in higher international metal prices, traders said.

Tata Steel gained 2.1 percent, Jindal Steel And Power Ltd rose 3.2 percent, and Sesa Sterlite ended 4.2 percent higher.

Oberoi Realty Ltd ended 8.7 percent higher after earlier rising as much as 17.6 percent after the real estate developer emerged as the highest bidder for an industrial land parcel being sold by Tata Steel Ltd with a final bid of 11.55 billion rupees.

Shriram City Union Finance Ltd gained 0.6 percent after Morgan Stanley initiated coverage on the company with an "overweight" rating.

However, exporters fell on fears of margin erosion as the rupee hit a fresh 8-month high.

Among pharmaceutical exporters, Lupin Ltd fell 2.8 percent and Cipla Ltd lost 1.1 percent.

In software stocks, Infosys Ltd fell 0.2 percent and Wipro Ltd ended 0.5 percent lower.

(Editing by Subhranshu Sahu)