The Sensex was trading higher by 389 points, while the Nifty rallied 118 points in early trade, hitting a new lifetime high of 6420 points. Hopes that a strong BJP showing would enable a Narendra Modi led government at the centre in next year's general election saw markets gain momentum.
Capital good stocks and stocks from the infrastructure sector were in the limelight with Bharat heavy gaining 3 per cent, while other notable gainers were Crompton Greaves, up 4 per cent and Larsen and Toubro was also up 4 per cent.
PSU banking stocks which were the hardest hit in the last eight months also joined the rally on hopes that economic recovery under Modi would benefit these stocks. All of the PSU stocks gained in trade with notable winners being Union Bank, Syndicate Bank, Punjab National Bank and Bank of Baroda.
Private sector banks that have already gained substantially in trade also joined the rally with ICICI Bank, Axis Bank, IndusInd Bank and Yes Bank among the notable gainers.
Shares of ONGC and Colgate did not rally as much after shares of both the companies went ex-dividend.
There only Nifty loser in trade today was HCL Tech, which lost ground as the rupee strengthened past the 61 levels. 49 of the 50 stocks that form part of the Nifty were trading in the green.
Mid cap stocks in line with the broader markets also gained ground. Among the notable gainers from the space were Adani Power, Union Bank and Vijaya Bank.
Meanwhile, markets in Asia were trading higher on strong US jobs data led by strong gains in the Japanese Nikkei.