BENGALURU: IT services stocks drove Indian markets to a record high in the first trading session of 2021, as continued foreign fund inflows and expectations of imminent COVID-19 vaccine roll-outs kept investors bullish.

The blue-chip NSE Nifty 50 index rose 0.34% to 14,029.70 by 0515 GMT on Friday and the benchmark S&P BSE Sensex climbed 0.36% to 47,922.14.

The Nifty gained 14.9% in 2020 and the Sensex added 15.75%, both marking their best yearly performance since 2017. Both the indexes recovered more than 86% from March lows, boosted by liquidity support measures from global central banks and progress on the COVID-19 vaccine front.

"In spite of the market being heated up, foreign institutional investment flows continue... risk-on sentiment is prevailing, and money will keep pouring into markets like India," said Aishvarya Dadheech, a fund manager at Ambit Asset Management in Mumbai. "It is a very liquid market."

Investors are eyeing a meeting of the Indian drug regulator later in the day to consider approving AstraZeneca and Oxford University's COVID-19 vaccine for emergency use.

The Nifty IT index was up 0.95%, with heavyweight Tata Consultancy Services being the biggest boost to the Nifty 50.

Among individual stocks, Mahindra and Mahindra rose 2.2% and was the top percentage gainer on the Nifty. US automaker Ford Motor and Mahindra have called off their automotive joint venture due to challenges caused by the pandemic.

The Nifty Auto Index was up 0.66%. Indian automakers will be reporting December sales numbers on Friday.

Tractor maker Escorts rose 2.2% after reporting an 88% surge in sales.

Maruti Suzuki India was up 0.8% after reporting a 20% rise in sales.

Municipal solid waste management company Antony Waste Handling Cell jumped nearly 40% in its market debut.

Most markets across the world are closed for New Year's Day.