The benchmark Sensex rallied over 344 points to trade near record levels while the broader Nifty gained over 1 percent in afternoon trade as metal, IT, healthcare, oil & gas, banks and financials stocks advanced on 23 January.
The Nifty breached record 11,000 mark and the Sensex scaled 36,000-level as good corporate earnings, strong macro-economic indicators and upcoming Budget lifted the investor sentiment.
The IMF said India's growth will pick up to 7.4 percent in 2018-19 to regain the status of the fastest growing economy in the world. Better global growth prospects also aided the stock markets.
The benchmark BSE Sensex was trading higher by 344.32 or 0.96 percent at 36,142.33 at 1230 hrs. It hit all time trading high of 36,147.75 in early trade.
The broader Nifty was trading at 11,085.30, up by 119.10 points or 1.09 percent.
Major gainers were Tata Steel 3.61 percent, Infosys 1.97 percent, SBI 1.86 percent, Dr Reddy 1.63 percent, Coal India 1.53 percent and Reliance 1.52 percent.
Foreign Portfolio Investors (FPIs) bought shares worth Rs 1,567.51 crore on net basis while Domestic Institutional Investors (DIIs) also sold equities to the tune of Rs 461.87 crore on 22 January, provisional data showed.
Asian markets were trading higher following the stronger lead from Wall Street after US lawmakers reached a deal to end a government shutdown.
US stocks ended higher after the Senate reached a short-term compromise to end a government shutdown that began last week.
Rupee Up 10 Paise vs US Dollar
The rupee pared its early losses to recover 10 paise to 63.77 against American currency on bouts of dollar selling by banks and exporters amid volatile dollar overseas.
The rupee opened a tad lower at 63.88 per dollar as against Monday's closing level of 63.87 at the inter-bank foreign exchange here.
Later, the Indian unit witnessed choppiness and fluctuated between a low of 63.91 per dollar and a high of 63.75 per dollar during morning trade.
It was quoting at 63.77 per dollar at around 10:15 hours. "Good FII inflows and stocks rallying to record highs were supporting the rupee sentiment," a dealer said.
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