Anticipation of more economic reforms such as strategic divestment of state-run companies and tax cuts, helped to lift the S&P BSE Sensex to above the 40,000-mark for the first time in the last five months.
Subsequently, even positive global cues, expectations of healthy quarterly results and hopes of a sales boost on the back of the festive season also pushed the equity indices higher.
The Sensex closed 220 points higher (up 0.55%) at 40,051, which is reportedly its third highest close ever. The broader Nifty closed 0.50% higher at 11,844.
Expectation of the US Federal Reserve cutting interest rates for the third time this year also lifted sentiments.
Healthy buying was observed in capital goods, oil and gas, IT, FMCG and banking stocks.
The S&P BSE Oil & Gas index closed at 15,624, up 1.31%.
Among OMCs, top performers were Petronet LNG, which was up by 5.09%, followed by Castrol India (up 3.87%), Hindustan Petroleum Coporation (up 3.24%) and Indian Oil Corporation (up 2.01%).
Stocks of Public Sector banks too rose with SBI, PNB and Bank of Baroda seeing gains between 3% and 3.5%.
whereas scrip of consumer durables and metal companies came under heavy selling pressure.
At around 2.30 p.m., the S&P BSE Sensex traded at 40,064.40, higher by 232.56 points or 0.58 per cent from the previous close of 39,831.84.
It had opened at 40,055.63 and has so far touched an intra-day high of 40,178.12 and a low of 39,805.11.
Similarly, the Nifty50 of the National Stock Exchange traded at 11,846.10, higher by 59.25 points or 0.50 per cent from its previous close.