Infra, capital goods, auto, metal, technology, pharma, financials and realty counters spearheaded the surge as even mid and small cap stocks joined the party.
The sentiment turned highly positive after the Modi government announced ambitious roadmap to revive the struggling economy.
The agenda of the new government was highlighted by the President Pranab Mukherjee in the Parliament today, when he said that curtailing food inflation will be the Prime Minister Narendra Modi's top priority as his government pursues broad economic reforms focused on job creation, reviving growth, encouraging FDI and introducing a non-adversarial tax regime.
Ongoing solid rally in global financial markets also underpinned the investor optimism.
Nifty, continuing its record-breaking run for the third straight session, recorded a new intra-day historic high of 7,673.70 before conquering another lifetime closing high of 7,654.60, a sharp spike of 71.20 points or 0.94 per cent.
Grasim, the highly diversified conglomerate was the top index performer after CLSA raised its target price on improving outlook for the company. The stock zoomed by 11.55 per cent to close at Rs 3,697.70 with high volume.
Other smart gainers included Power Grid, Bajaj Auto, Coal India, Asian Paint, ACC, Ultracemco, L&T, DLF and Tata Steel.
However, profit-taking at higher levels in select energy and financial stocks eroded some gains. The key laggards were ONGC, BPCL, Hul, SBIN, Infosys, Cairn, M&M, Kotak Bank, NTPC and Axis Bank.
Turn-over in the cash segment dropped to Rs 26,169.37 crore from Rs 26,998.76 crore last Friday. A total of 19,371.23 lakh shares changed hands in 10,266,138 trades, while market capitalisation stood at Rs 88,71,967 crore.