The 30-share Sensex opened on a strong footing and rose to new intra-day high of 23,572.88 points. It settled for the day at 23,551.00, a new record at closing, by gaining 556.77 points or 2.42 per cent. Its previous record closing high was 22,994.23 reached on Friday.
Of the 30 Sensex scrips, 25 led by ITC, HDFC Bank, RIL and L&T rose, while just five ended lower. Banking, capital goods, oil and gas, auto, IT and auto shares were in demand, while pharma sector counters were under some pressure.
"Markets were on a fire as optimism increased in favour of BJP winning majority in Lok Sabha elections 2014," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1,268.78 crore on Friday as per provisional data from the stock exchanges.
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Market experts said positive global cues and overall optimism also boosted the buying sentiment, lifting the indices to to their lifetime high levels.
"Gains in benchmark indices were also supported by strong buying by retail investors in small and mid-cap stocks", said Rajiv Malik, a Delhi-based stock broker.
The BSE Oil and Gas index rose 3.07 per cent, the best gain among sectoral indices. The Power sector index rose by 2.98 per cent and Auto index by 2.88 per cent.
Midcap index ended 2.42 per cent higher and the small-cap barometer by 0.51 per cent at 7,632.29.