The mood in the market remained bullish on Tuesday as the Sensex closed just 483 points short of 50000.

The early morning wobble sparked by the RBI’s warning of a dramatic surge in bad loans on the books of banks in its latest Financial Stability Report dissipated very quickly by mid-morning.

Bank stocks were subdued in the morning but then rose sharply as the market shook off these concerns as it eagerly turned to a steady stream of terrific numbers expected from IT giants Infosys and Wipro and talk that the government may create a bad bank to house stressed debt.

Observers do not rule out the possibility of the buying momentum picking up on Wednesday as retail inflation in December 2020 came within the RBI’s band.

CPI inflation stood at 4.59 per cent in December, which is the lowest reading since March last year. The pleasant surprise could give the RBI the much needed room to cut interest rates further.

The 30-share Sensex opened marginally lower at 49228.26 and hit a intra-day low of 49079.57 as banking counters saw some selling.

However, the mood changed post noon and the gauge surged to its all-time peak of 49569.14 because of the robust buying in index heavyweights Reliance Industries and HDFC Bank. The index finally finished at its new closing record of 49517.11, up 247.79 points or 0.50 per cent.

Similarly, the broader NSE Nifty advanced 78.70 points, or 0.54 per cent, to close above the 14500 mark at a new peak of 14563.45. It scaled a record level of 14590.65 during the session.

“Today, after a long underperformance, the RIL stock led from the front along with few banking heavyweights. Every day some new theme comes up to keep up the momentum, but since the last couple of sessions, it is observed that individual stocks are witnessing some profit booking as well. Hence, one needs to be very selective and look for trading opportunities on the both sides of trend,’’ said Sameet Chavan, chief analyst-technical and derivatives at Angel Broking.

Sector-wise, BSE telecom, realty, energy, oil and gas, utilities, auto and finance indices rose as much as 2.85 per cent, while consumer durables, healthcare, capital goods and FMCG saw losses.

Broader BSE midcap and smallcap indices climbed up to 0.44 per cent.

Global markets were mixed following negative cues from Wall Street and rising Covid-19 cases in many countries. In Asia, key indices in Shanghai, Hong Kong and Tokyo ended with gains, while Seoul was in the red.

``The pace of the market rally continued despite RBI’s caution over elevated NPA levels in 2021, supported by PSU Banks and Auto stocks. Majority of the sectors traded in the green in anticipation of good quarterly result while pharma and FMCG experienced some selling. US bond yield has changed its trajectory to a rising trend, which could impact EMs in the future. But FII inflows are strong and the dollar continues to be weak’’, Vinod Nair, Head of Research at Geojit Financial services added.