(Reuters) - The BSE Sensex closed at a record high on Wednesday as telecoms firms such as Bharti Airtel surged after reporting higher margins, while continued foreign inflows boosted sentiment.
The Sensex has now gained 21 percent since hitting an intraday yearly low of 17,448.71 points on August 28, a period when the rupee was at record lows and the country appeared in the midst of a crisis of confidence.
Yet the subsequent delay in the U.S. Federal Reserve's tapering of its monetary stimulus and signs showing the economy may have bottomed have sparked a revival, and the index, also known as the Sensex, is only 0.8 percent away from a record high of 21,206.77 points hit on January 10, 2008.
"May was the month in which tapering fears first surfaced and swept the rupee along. We feel that the Fed may not taper at all till February. That means liquidity will continue to flow, charming our markets," said Jyotheesh Kumar, executive vice-president of HDFC Securities.
Trading could turn more volatile on Thursday after the outcome of the U.S. Fed's two-day policy meeting overnight and the expiry of domestic derivatives.
The Sensex rose 0.5 percent, or 104.96 points, to end at 21,033.97, a record closing high.
The broader Nifty also rose 0.5 percent, or 30.80 points, to end at 6,251.70, marking its second consecutive day of gains.
Foreign investors were net buyers for an 18th consecutive session on Tuesday, bringing their total buying to nearly 150 billion rupees during that period.
Among telecoms companies, Tata Communications Ltd ( TATA.NS ) jumped 10.2 percent after its July-September operating profit beat expectations, while Bharti Airtel Ltd ( BRTI.NS ) surged 5.5 percent after its September-quarter operating margin grew 32 percent.
Drugmaker Lupin Ltd ( LUPN.NS ) rose 1.4 percent after its quarterly consolidated net profit rose nearly 40 percent, beating analysts estimates.
Dr.Reddy's Laboratories Ltd ( REDY.NS ) gained 3.9 percent after earlier marking its all-time high at 2,544.60 rupees, a day ahead of its July-September earnings.
Havells India Ltd ( HVEL.NS ) rose 7.3 percent after the company said quarterly profit rose by 45 percent to 1.26 billion rupees.
Maruti Suzuki India Ltd ( MRTI.NS ) ended 0.1 percent higher, adding to Tuesday's gains of 8.1 percent, after the country's biggest carmaker said net profit tripled from a year earlier, beating estimates.
Among stocks that fell, shoemaker Bata India Ltd ( BATA.NS ) lost 0.8 percent after its quarterly net profit rose by 17 percent to 375.9 million rupees, lagging analyst estimates.
Larsen & Toubro Ltd ( LART.NS ) ended 0.6 percent lower after J.P.Morgan downgraded the stock to "neutral" from "overweight", saying the current share price adequately discounts near-term positives.
(Editing by Prateek Chatterjee)