Among prominent stocks that reached their 52-week high include Cipla, M&M, Hero MotoCorp, ICICI Bank, Maruti Suzuki and Tech Mahindra.
The 30-share Sensex settled at 26,867.55, a new closing high with a gain of 229.44 points or 0.86 per cent over the previous close.
From the 30-Sensex stocks, 22 settled the day in green with Hero MotoCorp emerging as the biggest gainer.
Among the 12 BSE sectoral indices, except FMCG others settled with gains led by metal and capital goods.
Sentiments in the stock market became bullish as foreign inflows picked up after economic growth improved to two-and-a-half year high of 5.7 per cent in the April-June quarter, brokers said. Growth numbers were released on last Friday.
"The stellar run for Indian equity markets continued on the back of better than expected GDP data and an increased conviction amongst the investing community on equities as an asset class for the next three to five years," Devang Mehta, SVP & Head Equity Advisory & Retail Sales, Anand Rathi Financial Services Ltd, said.