The NSE Nifty also spurted by 94.50 points to close at a new record of 7,108.75, after logging a fresh all-time intra-day high of 7,172.35 points.
During the session, the 30-share BSE Sensex scaled its fresh life-time high of 24,068.94 points. It settled for the day at 23,871.23, a third straight record closing. This was a gain of 320.23 points, or 1.36 per cent over Monday's close. The Sensex has now spurted by over 1,500 points in three days.
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Stocks of power, consumer durables, oil and gas, IT, PSUs, capital goods, realty and FMCG continued their winning spree.
The BJP-led NDA is projected to form the government at the Centre with exit polls on Monday night giving between 249 and 290 seats to the Narendra Modi-led grouping, which is close to the half-way mark in the 543-member Lok Sabha.
"Market sentiment has been boosted by exit poll results indicating that BJP shall be able to win by majority. Investors have pegged strong hopes with the new government and optimism is seen ahead of final results," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
The broad-based Nifty of the National Stock Exchange gained 94.50 points, or 1.35 per cent, to settle at record closing of 7,108.75. Its earlier peak on a closing basis was 7,014.25. In three days, Nifty has gained about 450 points.
Shares of Bharat Heavy Electricals Ltd (BHEL) surged 10.25 per cent to Rs 218.80 following reports that the Cabinet is likely to ratify the decision to sell 4.66 per cent stake in the power equipment maker through a block deal.
Other prominent contributers to the Sensex were Reliance Industries which rose 3.15 per cent, Hero MotoCorp by 5.39 per cent, Larsen and Toubro by 1.56 per cent, ONGC by 3.81 per cent and Tata Power by 3.62 per cent.
With continued improvement in trading sentiments, buying activity by retail investors spread to small-cap and mid-cap stocks, brokers said.
Dipen Shah, Head- Private Client Group Research, Kotak Securities says, "Expectations are now of a stable Government at the Centre and that has raised hopes of better growth for the economy. The markets have risen based largely on these expectations. We believe that, the new governments intent and announcements pertaining to fiscal and investment reforms will be critical for the sentiment of the markets to be sustained, in the short term. We do believe that, the FY15 growth rates will likely improve only modestly and strong growth can be expected to return in FY16 and beyond."
A firming trend in the other Asian markets, a higher opening on the European markets and a record closing on the US markets in yesterday's trade too buoyed the trading sentiments in India, traders said.
Among the 30 Sensex components, 24 stocks gained, while Dr Reddys, HDFC Bank, Hindalco Industries, Mahindra and Mahindra, Sun Pharma and Tata Motors ended in negative zone on profit-booking.
Sectorally, the power sector index gained the most by surging 3.26 per cent, followed by consumer durables by 2.92 per cent and oil and gas index by 2.84 per cent.
Harsha Upadhyaya, Chief Investment Officer - Equity, Kotak Mutual Fund, said: "Once the election results are announced, investor focus is likely to shift towards composition of the new government and likely policy initiatives in the run-up to the budget."
The IT index rose by 2.59 per cent and PSUs index by 2.45 per cent. However, healthcare sector index slipped 0.45 per cent.
Indian shares hit record high; exit polls point to Modi
India's benchmark BSE index rose on Tuesday to a third consecutive record high, surpassing the key psychological level of 24,000 points as stocks tied to the domestic economy surged after exit polls showed the Bharatiya Janata Party and its allies winning a majority in the elections.
The BSE index rose as much as 2.2 percent to hit a life high of 24,068.94, while the broader NSE index rose as much as 2.3 percent to hit a record high of 7,172.35.
Narendra Modi is set to become India's next prime minister when actual results are out on Friday, with his coalition broadly tipped to grab the 272 seats needed to clinch a majority, four major exit polls showed on Monday.
Still, exit polls by media organisations have proven unreliable in the past, while doubts have started emerging over whether markets have run ahead of fundamentals as election optimism overshadows issues like tepid earnings growth, fiscal deficit and sticky inflation.
"While the long-term uptrend remains intact, the market looks a bit stretched as it has discounted 260-270 seats for NDA now, so a rally would extend only if we get a positive surprise of say 300 seats," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.
"The market had wind of exit polls' results and therefore had run nearly 5 percent in two days before that."
The BSE index ended up 1.36 percent at 23,871.23, while the NSE index ended 1.35 percent higher at 7,108.75, adding to their over 4 percent gains in the previous two sessions.
Shares of companies tied to the domestic economy led the gains. Bharat Heavy Electricals Ltd jumped 10.2 percent, while Oil and Natural Gas Corp Ltd rose 3.9 percent.
Larsen & Toubro Ltd rose 1.6 percent, while mortgage lender Housing Development Finance Corp ended 1.2 percent higher. The NSE bank sub-index ended 0.6 percent higher after earlier hitting a record high at 14,367.75.
State Bank of India Ltd gained 1.5 percent, while Bank of Baroda Ltd rose 4.5 percent.
Among other domestic-oriented stocks, Ambuja Cements Ltd surged 4.8 percent, and Tata Power Co Ltd rose 3.7 percent. However, Dr. Reddy's Laboratories Ltd, India's second-largest drugmaker by sales, slumped 4.1 percent after its quarterly net profit fell short of analyst estimates due to a rise in expenses. For additional stocks on the move double click
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