Energy conglomerate Reliance Industries rallied 3.1% on talk of a likely petrochemical joint venture announcement. The company, which has the heaviest weight on the main index, has called a news conference at 5:30pm.

Kingfisher Airlines plunged nearly 20% at one stage as the debt-crippled carrier edged closer to the brink after mass cancellation of flights and the resignation of dozens of pilots.

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Markets closed on Tuesday with gains. Mint’s Krishna Merchant talks about the biggest gainers and the overall cautious sentiments of investors.

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The stock, which has slumped about 60% since the start of last year, covered the day’s losses and ended up 0.4% on hopes the carrier would get additional bank finance, analysts said.

The 30-share BSE index rose 0.76%, or 139.26 points, to 18,428.61, its highest close since 27 July, 2011. Nineteen of its constituents gained.

“The expectation from the government is to set the policy framework right on the fiscal side in the upcoming budget which is driving new money into the market,” said Deven Choksey, managing director, K.R. Choksey.

The federal government is scheduled to unveil the annual budget on 16 March.

The benchmark index is up more than 19% this year, mainly on buying by overseas portfolio investors who have pumped in over $4.4 billion so far, after pulling out more than $500 million in 2011.

Consumer price data released by the government on Tuesday showed inflation pressures are moderating, adding weight to views that the central bank has room to cut interest rates.

ICICI Bank rose 1% and State Bank of India firmed 1.5% after a central bank deputy governor said it would consider reducing banks’ reserve requirements to help ease tight cash conditions.

State-run Oil and Natural Gas Corp rallied 3.8%, a day after a local media report said two Gulf wealth funds had pledged to buy up the company’s planned 5% stake sale.

“Heavyweights like ONGC have started performing on the expectation that the government will bring new investment into the company,” Choksey said.

The market was closed on Monday for a local holiday. Automaker Mahindra & Mahindra climbed 1.9% after the company said it is in talks with South Korea’s Ssangyong Motor Co to set up an assembly line in Russia.

The market also cheered the long-awaited agreement for a crucial second bailout package for debt-stricken Greece. Euro zone finance ministers concluded 13 hours of talks by sealing a bailout for the country that will resolve its immediate financing needs with a 130-billion-euro rescue package and measures to cut its debt to 121% of GDP by 2020.

The 50-share NSE index rose 0.77% to 5,607.15. In the broader market, gainers beat losers in the ratio of 1.4:1 on heavy volume of 1.12 billion shares.

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UCO Bank climbed 3.3% after the state-run lender’s board approved issue of shares to Life Insurance Corp of India on a preferential basis.

HCL Infosystems Ltd rose more than 2% after the company won a Rs 280 crore order from Electronics Corporation of Tamil Nadu.

The broader 50-share NSE index provisionally ended 0.77% higher at 5,607.15.