The wide-based NSE Nifty index rose by 31.55 points to close at record 8,114.60 points. The index touched intra-trade record high of 8,141.90 points, surpassing previous record of 8,101.95 hit yesterday.
The 30-share Sensex opened on a strong footing and rose quickly to historic high of 27,225.85 points as buying momentum picked up.
But gains were capped by profit-booking at record levels and the barometer settled at 27,139.94 -- fresh record closing level -- with net gains of 120.55 points or 0.45 per cent over last close. The Sensex bettered its previous closing peak of 27,019.39 hit yesterday.
The gauge has now gathered over 825 points in nine straight sessions.
IT, realty, teck metal and capital goods stocks were in keen demand while some counters from FMCG, banking and power segments suffered losses.
IT stocks, led by TCS, were in the limelight on fresh spell of buying after bullish US manufacturing and construction data. TCS, Infosys Ltd and Wipro rose between 2.45 per cent and 3.4 per cent.
"Global markets also showed positive signs as tensions within Russia and Ukraine seemed to ease. Softer crude oil prices further maintained positive momentum on the bourses. Stock specific buying was seen with Bharti Airtel and Coal India amongst major gainers," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio Ltd.
Russia and Ukraine today reached an agreement on a cease-fire in eastern Ukraine, sending lower brent crude prices to 16-month low near USD 100 a barrel.
Meanwhile, Foreign portfolio investors (FPIs) infused Rs 672.81 crore yesterday as per provisional data.
Indian shares extend record-setting rally
(Reuters) Indian shares extended a record-setting winning streak on Wednesday as software exporters such as Infosys Ltd rallied on strong U.S. economic data, while continued foreign buying and falling oil prices also helped the gains.
A fall in Brent crude prices to 16-month lows and recent supportive economic data at home such as better-than-expected 5.7 percent GDP growth in April-June are also reinforcing investor optimism.
The gains also tracked a rise in global stocks after Ukraine said it reached a ceasefire agreement with Russia, despite conflicting reports from the Kremlin.
Overseas investors continued to buy Indian stocks ahead of a crucial European Central Bank meeting on Thursday, which is widely expected to provide further stimulus for revival, thereby aiding liquidity in the financial markets.
Foreign portfolio investors bought shares worth 6.73 billion rupees ($111 million) on Tuesday, taking their total purchase to over $13 billion so far this year.
"Political and economic changes have led to a positive trend in Indian equities which should continue. Also, India stands out in the world due to its strong domestic growth story," said Nirakar Pradhan, chief investment officer at Future Generali India Life Insurance.
The benchmark BSE index touched its fourth consecutive record high of 27,225.85, before ending 0.45 percent higher at 27139.94.
The NSE index rose as much as 0.73 percent to mark its third straight record high at 8,141.90. It closed up 0.39 percent at 8114.60. Software stocks gained after data showed U.S. manufacturing activity hitting a nearly 3-1/2-year high last month and construction spending rebounding strongly in July, providing signs the economy entered the third quarter on a strong footing.
Infosys gained 3.3 percent, Tata Consultancy Services ended up 2.7 percent, Wipro rose 2.9 percent, while Tech Mahindra advanced 1.5 percent.
Meanwhile, oil retailers gained after Brent crude slumped to 16-month low on Tuesday. Prices rebounded on Wednesday but ample supplies and lingering demand worries limited the rally.
Hindustan Petroleum Corp gained 1.3 percent, Indian Oil Corp rose 1.6 percent, while Bharat Petroleum Corp ended 0.13 percent higher.
Carborundum Universal Ltd ended 2.6 percent higher after earlier marking a record high of 217.35 rupees as HDFC Mutual Fund raised stake in the abrasives maker to 4.61 percent from 4.08 percent, via a block deal on Tuesday.
Tata Motors Ltd gained as much as 2.8 percent after a slew of rating upgrades, citing valuations and improving outlook for its luxury car making unit Jaguar Land Rover .
Among the stocks that fell, Cipla lost 0.7 percent after surging to a record high of 575 rupees on Tuesday.