Mumbai: After a day's breather, the benchmark indices Sensex and Nifty resumed record-setting rally to scale new peaks and logged their best single-day gains in nearly five months, tracking positive global cues as investors took heart from the US Federal Reserve's "gradual approach" comments on monetary policy tightening.
The BSE Sensex surged over 442 points to close at its life-time high of 38,694.11 and the broader NSE Nifty ended at a fresh record of 11,691.95, rising 134.85 points.
Both indices recorded their biggest single-day gains in nearly five months. On April 5 this year, the 30-share Sensex had rallied 577.73 points and the Nifty 50 had jumped 196.75 points.
Last week, US Federal Reserve Chairman Jerome Powell had said that a "gradual approach" to interest rate hikes would be in the best interest of the US economy and jobs generation, lifting Wall Street sentiment at the week's close.
Asian shares too ended higher and European markets were firm in their early deals, tracking Friday's gain in US stocks.
Also, global markets reacted positively to the People's Bank of China announcement that it was tweaking its methodology for the fixing of the yuan's daily midpoint as part of efforts to stabilize the currency market.
Sentiment also got a boost on unabated buying by domestic institutional investors (DIIs) and fresh foreign fund inflows, giving a push to trading activities.
"Market rallied to new high supported by positive global market followed by Fed's comment on the gradual pace of rate hike which boosted investors sentiment. The rally was broad-based given the sense of improved outlook on account of revival in earnings growth. Despite high valuations, continued buying by FIIs and DIIs adding liquidity in the market," Vinod Nair, Head of Research, Geojit Financial Services Ltd, said.
Buying momentum was so strong that all sectoral indices, except realty, ended in the positive terrain.
The 30-scrip Sensex, after opening on a strong footing, continued its upward march to scale an all-time high of 38,736.88, breaking its previous (intra-day) record of 38,487.63 hit on August 23.
It lost some ground on profit-booking and finally ended 442.31 points, or 1.16 percent, higher at 38,694.11, going past its previous record close of 38,336.76 reached on August 23. The gauge had lost 84.96 points in the previous session on Friday.
The NSE Nifty too breached the 11,700-mark for the first time to touch a new high of 11,700.95 before concluding 134.85 points, or 1.17 percent, higher at 11,691.95.
The gauge bettered its previous intra-day peak of 11,620.70 and closing high of 11,582.75, marked on August 23.
Meanwhile, domestic institutional investors (DIIs) bought shares worth a net Rs 904.75 crore on Friday, while foreign portfolio investors (FPIs) sold shares worth a net of Rs 75.78 crore, provisional exchange data showed.
In the Sensex kitty, Bharti Airtel emerged as the best performer by surging 3.93 percent, followed by PowerGrid at 3.64 percent.
Among other prominent gainers, ICICI Bank rose 2.97 per cent, followed by SBI 2.65 per cent, Infosys 2.53 per cent, Yes Bank 2.26 per cent, Axis Bank 1.63 per cent, Kotak Bank 1.57 per cent, Wipro 1.44 per cent, Tata Motors 1.29 per cent, NTPC 1.13 per cent, IndusBank 1.09 per cent, RIL 1.06 per cent, ITC Ltd 1 per cent, L&T 0.99 per cent and Tata Steel 0.97 per cent.
Other winners were Maruti Suzuki 0.94 per cent, M&M 0.91 per cent, Bajaj Auto 0.90 per cent, Coal India 0.76 per cent, ONGC 0.74 per cent, Adani Ports 0.74 per cent, Vedanta Ltd 0.67 per cent, HUL 0.56 per cent, HDFC Bank 0.55 per cent, Asian Paint 0.47 per cent, TCS 0.46 per cent, HDFC 0.43 per cent and Hero MotoCorp 0.35 per cent.
In contrast, Sun Pharma ended in the red, falling 1.25 percent on profit-booking.
Banking, finance, power and PSU stocks were at the forefront, helping the key indices scale new highs.
Sectorwise, the BSE Power index climbed 2.37 percent, followed by PSU 1.69 percent, banking 1.69 percent, IT 1.54 percent and teck 1.54 percent.
Other sectoral gainers were infrastructure 1.46 per cent, metal 1.45 per cent, telecom 1.28 per cent, finance 1.13 per cent, oil and gas 1.09 per cent, consumer durables 1.04 per cent, energy 1.01 per cent, capital goods 0.90 per cent, auto 0.87 per cent, FMCG 0.65 per cent and healthcare 0.49 per cent.
While realty index ended lower by 0.16 percent.
The rally also extended to the broader markets as well, lifting the mid-cap index by 1.07 percent and small-cap 0.70 percent.
In the Asian region, Japan's Nikkei ended 0.88 percent higher, while Hong Kong's Hang Seng gained 2.08 percent. Shanghai Composite Index too up 1.89 percent.
In the Eurozone, Frankfurt's DAX gained 0.41 percent and Paris CAC advanced 0.40 percent in early deals. London Stock Exchange was shut for a public holiday today.