The 30-share index, which has gained over 428 points in the past three sessions, rose further by 43.93 points, or 0.26 per cent, to 16,509.98 points.
The wide-based National Stock Exchange Nifty index moved up by 13.35 points, or 0.26 per cent, to 4,980.65. Brokers said buying in oil and gas, healthcare and power stocks supported the rise in the Sensex.
Market heavyweight Reliance Industries surged 3.90 per cent to Rs 769.25 on speculations that the company may consider share buyback plan soon.
Brokers said sentiments remained firm largely on the back of positive macroeconomic factors such easing inflation, rising hopes of a cut in interest rates amid indications that the economy may grow faster in the coming months.
In Asia, Hong Kong's Hang Seng Index rose by 0.12 per cent, while Japan's Nikkei gained 1.10 per cent in morning trade today. The Dow Jones Industrial Average ended 0.48 per cent higher in yesterday's trade.