Sensex logged record closing high for the second straight day.
The HDFC and ICICI Bank stocks touched their respective 52-week high on the BSE.
Among the sectors, metal stocks was the top sectoral gainer on Tuesday. Nifty metal index jumped nearly 3 per cent as its constituent stocks like Jindal Steel, Tata Steel, SAIL and Vedanta gained in the 3 to 8 per cent range.
Significant decline was seen in the volatility index owing to the easing of trade tension between the US and China which led the Wall Street stocks notch record closing highs on Monday. The VIX fell over 6 per cent on Tuesday.
Vinod Nair, Head of Research at Geojit Financial Services said: "Positive global sentiments buoyed by easing trade war tensions between the US and China continue to pump market.
Nair, however, added that the economic growth remains on the lower side while risk appetite of investors are gradually improving on expectation of further steps from the government in the upcoming budget to revive consumption and attract investments."
Despite the rising inflation and weak growth, the markets have been marching forward owing to the strong inflow of FII and favourable interest rate by global central banks.
On Monday, Sensex surged to lifetime highs but fell to close in the red after the wholesale inflation figures rose for the first time in six months, adding to the weak growth rate and high consumer inflation.
Foreign Portfolio Investors pumped in Rs 728.13 crore worth of scrips on Monday while its domestic counterpart sold stocks worth Rs 796.38 crore.
( With inputs from IANS )