It sent the bellwether index Nifty to end at all time closing high of 6,401.15 with a handsome 72.50 points, or 1.15 per cent gain on the National Stock Exchange (NSE). Its previous closing high of 6,363.90 was on December 9, 2013.
Extreme investor optimism that the economy will regain its strength once the new government comes aided the surge.
Strong foreign institutional investors sentiment towards India on the back of positive economic momentum and improvement in the global macro outlook also supported the general mood.
Financials, energy, metal, auto, infra, fmcg and tech related stocks mainly participated in today's rally. While healthcare counters witnessed some amount of profit-taking.
India's current account deficit has fallen to USD 4.2 billion or 0.9 per cent of GDP in December quarter of 2013-14 on the back of rise in exports and fall in gold imports.
After a positive start, the key indices maintained strong momentum throughout the session supported by firm rupee sentiment on the back sharp decline in CAD.
Elsewhere in Asia and other emerging markets, equities ended mostly higher despite ongoing liquidity crisis in China and Federal Reserve's latest economic report ahead of the European Central Bank's policy meet outcome.
JP Associates, DLF, Hindalco, BPCL, BHEL, Grasim, ACC, Ultracemco, ONGC and Ambuja Cement were prominent gainers.
The laggards included Cipla, Wipro, Lupin, Tata Motors, TCS, Sun Pharma, Hindunilver, Asian Paint and SBIN.
Turnover in the cash segment was Rs 13,053.55 crore, from Rs 11,919.12 crore yesterday. A total of 7,455.11 lakh shares changed hands in 67,96,579 trades. Market capitalisation stood at Rs 68,81,701 crore.