Gains in key IT, capital goods, healthcare and metal stocks, after consistent buying by domestic and foreign investors, helped both the key indices to scale new peaks.
The broad-based NSE Nifty rose 52.80 points, or 0.50 per cent, to end at 10,530.70
The NSE Nifty went past the 8,600-mark for the first time since November 1.
The Sensex and Nifty remained above their key levels of 36,000 and 10,900 throughout the session, indicating strong investor optimism after a prolonged spell of caution.
Tata Steel was the day's worst performer in the Sensex pack, plunging 3.25 per cent, followed by Bharti Airtel at 3.05 per cent.
Bajaj Auto was the top gainer in the Sensex pack, surging 3.95 per cent followed by Maruti Suzuki at 2.69 per cent.
The BSE gauge Sensex fell 73.88 points to 35,548.26 and the NSE Nifty slid 17.85 points to 10,799.85, taking cues from tumbling global shares.
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The sentiment-driven rally also got support from stock specific earning results and Finance Minister Arun Jaitley's statement that the Centre will step up reforms to attract more investment and fill up infrastructure deficit.
Of the 30-share Sensex, 13 ended higher, while 17 led by Power Grid, Tata Steel, Bajaj Auto, Hero MotoCorp, NTPC, Tata Motors, Dr Reddy's, M&M, GAIL, Infosys and L&T finished lower, fell by up to 2.40 per cent
The central bank may need to further ease the rates by 50-75 bps.
Domestic market is losing its trend to rate sensitive stocks post the announcement of the new RBI governor who is likely to maintain a cautious stance on interest rate cut
Sectoral performance was mixed with media and PSU banking stocks attracting buyer interest and healthcare, FMCG and metal stocks bearing the brunt of the bears
The market sentiment was also impacted by mixed global cues as setbacks for a healthcare overhaul in the US raised doubts over prospects for a range of reforms backed by President Donald Trump.
The broader Nifty, after touching a high (intra-day) of 10,555.50 points, finished at 10,539.75, up 84.80 points, or 0.81 per cent.
After paring some gains, the 30-share index settled at an all-time closing high of 28,008.90, up by 98.84 points, or 0.35 per cent, over the previous close.
The broader Nifty of National Stock Exchange scaled the 10,200 mark intra day before closing at 10,184.85, showing a sizeable gain of 38.30 points, or 0.38 per cent.
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The BSE benchmark Sensex surged about 241 points to end at 35,165.48 and the NSE Nifty gained 84 points to close at 10,688.65.
Top gainers among the S&P BSE Sensex include GAIL, Dr Reddy's Laboratories and Bharti Airtel, all edging up by 1% in late morning deals
The 50-share NSE Nifty was trading lower by 24 points.
Notable losers were ONGC, Axis Bank, ITC, SBI, ICICI Bank, NTPC, Hero Motocorp, Sun Pharma and Bharti Airtel who fell by up to 2.80 per cent.
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The trend was visible in the early trade on Thursday as investors indulged in trimming their bets after the minutes of the US Federal Reserve's September meeting indicated a possible rate hike this year.
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On a weekly basis, the Sensex climbed 749.86 points or 2.69 per cent and the NSE Nifty soared 237.10 points or 2.76 per cent
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