The Sensex and the Nifty hit lifetime highs with the Sensex closing the day 290 points higher (provisional), while the Nifty rallied 104 points in trade.
Leading the pack of gainers was banking stocks with ICICI Bank rallying 5 per cent, while other notable banking gainers were IndusInd Bank, Yes Bank and Axis Bank.
PSU banking stocks also saw buying support with large scale gains coming in stocks like Union Bank of India, Canara Bank and Oriental Bank of Commerce.
FMCG stocks had a flat day of trade with ITC showing marginal gains and Hindustan Unilever ending the day flat.
Software stocks also did not rally as much as the banking stocks with Infosys and TCS ending the day with gains of less then 1 per cent.
Mid cap stocks also had a good run with gainers from the space being HPCL, Crompton Greaves and Hexaware.
Among the few Nifty stocks that lost ground in trade were Cipla, Jindal Steel and Lupin Labs. Power Grid Corporation whose FPO oversubscribed more ten 6 times, closed the day marginally higher.
Meanwhile, Asian markets ended the day higher l;ed by a strong rally in the Japanese Nikkei and the Jakarta Composite.