The benchmark Sensex today crossed record 23,000 level for the first time but closed a tad lower at 22,994.23, posting its biggest single-day gain of 650.19 points since September 2013, on strong FII buying in banking, auto and power stocks ahead of election results next week.
An officegoer walks past the statue of the bronze Bull outside the Bombay Stock Exchange (BSE) in Mumbai. RBI said risks to the growth of Asia's third-largest economy were "limited" after the US credit downgrade that has spooked global markets.
In the day trade, the 30-share BSE barometer scaled its all-time high of 23,048.49 points as ICICI Bank, Tata Motors and Reliance Industries spurted.
The broad-based Nifty of the National Stock Exchange too spurted by 198.95 points, or 2.99% to settle at record closing of 6,858.80. It touched an all-time intra-day high of 6,871.35 points, breaching previous record of 6,869.85 reached on April 25.
Both the indices posted their biggest single-session gains since September 19, 2013.
Buying activity gathered momentum as funds and investors were seen creating positions before the outcome of ongoing general elections next week.
"As the election D-day is approaching closer, the markets are rallying on anticipation of a favorable outcome," Dinesh Thakkar, Chairman & Managing Director, Angel Broking, said.
ICICI Bank rose the most by 6.63% among Sensex scrips, while Tata Motors spurted by 5.57%.
Hindalco (5.35%), HDFC Bank (5.31%) and BHEL (5.21%) were among top five gainers among index stocks. Besides, ONGC (4.13%), HDFC (4.07%), RIL (3.93%), SBI (3.88%) and L&T (3.29%) supported the rally.
A firming trend at other Asian bourses were other factors behind today's rally, brokers said.
In Sensex components, 27 stocks gained, while 3 declined.
The banking sector index gained the most by surging 5.34% to 15,721.36 followed by realty index by 4.38% to 1,420.52.
The power index rose by 4.12% to 1,743.52 and PSUs index by 3.57% to 6,767.66.