Sensex jumped to a fresh all-time intra-day high of 30,503 in the morning and closed at 30,582 by adding 260 points, while Nifty crossed 9,500, with retail investors steering the ship amid unabated foreign capital inflows.
Encouraging earnings also supported the rally.
The 30-scrip Sensitive Index (Sensex) of the BSE gained by 260.48 points or 0.86 per cent, to provisionally close at 30,582.60 points -- a new closing high.
The wider 51-scrip Nifty of the National Stock Exchange (NSE), which crossed the 9,500-mark for the first time during the mid-afternoon trade session, provisionally closed at a new high of 9,512.25 points -- up 66.85 points or 0.71 per cent.
All the BSE sectoral indices led by technology, power, FMCG, IT, consumer durables and healthcare were in the positive terrain, with gains of up to 0.66 per cent in the morning.
Both the key indices touched their fresh intra-day highs. The NSE Nifty touched an intra-day high of 9,517.20 points and the BSE sensex of 30,591.55 points.
According to market observers, healthy buying was witnessed in automobile, banking and IT stocks.
Tata Steel was on a bull run and added 0.82 per cent as investors widened their exposure ahead of its quarterly earnings due later in the day and on the government's decision to impose anti-dumping duty on some steel products.
Other major gainers that supported the key indices were Bharti Airtel (2.78 per cent), RIL (1.89 per cent), TCS (1.46 per cent), Dr Reddy's (1.30 per cent), Tata Motors (1.17 per cent) and ITC (1.05 per cent).
Sentiment remained upbeat mostly on robust foreign fund inflows and a better-than-expected earnings report card by some blue-chip companies so far, besides overnight gains in Europe and the US markets.
Japan's Nikkei rose 0.03 per cent while Hong Kong's Hang Seng shed 0.36 per cent in early trade today.
The US Dow Jones Industrial Average ended 0.41 per cent higher yesterday.