Bullish Sensex closes 240 points higher on reports of robust advance tax payouts

According to the analysts, market confidence was boosted by reports that some corporates had paid advance tax higher-than-expected, triggering hopes for a pickup in economic recovery.

"Some good advance tax numbers contributed to the rally today. Whatever we have seen so far is good, and expect other figures to be robust as well," said Neeraj Dewan, director of Quantum Securities.

Agrees Mahesh Patil, co-head of equity at Birla Sun Life Mutual Fund. According to Patil, though most stocks were trading well beyond their fundamentals, "but as we expect earnings upgrade, it would not look expensive."

The analysts said to watch out for financial stocks being bullish in coming days as State Bank of India, which paid advance taxes for the September quarter sharply higher than a year ago, indicating robust profit, could well set a trend.

Banks are also bullish on hopes the central bank will relax accounting rules for their government bond holdings, a move that will lower provisioning for notional mark-to-market losses, analysts said.

Other benchmarks that witnessed a quarter-on-quarter (QoQ) increase in their advance tax payouts were TCS, Tata Motors and Mahindra & Mahindra.