The Sensex was last trading 23 points higher at 21,188 points. The strong surge in benchmark indices can largely be attributed to foreign funds which have been aggressively buying ever since the Fed decided to hold its tapering programme.
Among the stocks that rallied in trade today were Hero Motor Corp, Jindal Steel, Sesa Sterlite, Reliance and State Bank of India.
PSU Banking stocks which had rallied sharply on Thursday following an improvement in the asset quality of PSU banks continued to find buyers at lower levels. Among the stocks that gained were Canara Bank, Bank of India and Punjab National Bank.
IT stocks were also having a good day of trade and were largely responsible for the Sensex hitting a new lifetime high. Today's gainers from the IT space included TCS, Wipro and HCL Tech.
Private sector banking names were a little subdued in trade after having run up sharply in the last few weeks.
Meanwhile, Asian markets were trading mixed with the Shanghai Composite, and the Straits Times trading with gains, while the Hong Kong's Hang sang declined in trade.