NSE's benchmark index Nifty 50 surged close to 1.3 percent to 12,071.70 in intraday trade on Monday, while BSE's Sensex hit a new all-time high of 40,879.85 points.
Nifty 50's previously recorded all-time high was 12,089 on 3 June. Sensex's last all-time high was recorded last week on 20 November at 40,816.38 points.
Factors that caused the surge:
1. US-China trade deal
Sentiments in Asian as well as European stock markets were trading higher on Monday over the possibility of the US and China signing the "phase 1" of their trade deal by the end of the year.
On Friday, American President Donald Trump and Chinese President Xi Jinping underscored their desire to sign a deal.
On Saturday, US national security adviser Robert O'Brien said an initial trade agreement with China was still possible by the end of the year.
The pan-European Stoxx 600 climbed 0.7 percent in early trade on Monday while all sectors and major bourses in the continent entered positive territory.
2. Sensex Rejig
On Friday, post market hours, Asia Index, which is a joint venture between S&P Dow Jones Indices and the BSE, said in a statement that Tata Motors, Tata Motors with differential voting right (DVR), Yes Bank and Vedanta will be dropped from Sensex. The index provider also said that UltraTech Cement, Titan Co Ltd and Nestle India will be replacing the stocks on BSE's benchmark index.
The changes, which will become effective from 23 December, will remove the highly volatile stock-Yes Bank- from the index, which has seen its value fall by 65 percent in the last year. Tata Motors has also seen a significant correction on account of its Brexit and JLR (Jaguar Land Rover) woes.
3. Hong Kong elections
In Asia, markets gained in the morning as traders monitored the outcome of the Hong Kong vote. Hong Kong's Hang Seng index jumped 1.5 percent to close at 26,993.04, with shares of life insurer AIA surging 3.62 percent after Reuters reported that pro-democracy candidates surged to a landslide victory following a record voter turnout.
The MSCI Asia ex-Japan index gained over 0.3 percent.
4. Foreign investment inflows
On Friday, foreign investors have put over Rs 5,000 crore into the Indian equity market as per data available on NSDL. Net inflows in the last week were at Rs 2,683.96 crore. So far in November, FIIs (foreign institutional investors) have invested Rs 17,548 crore in Indian markets.
5. Technical factor
Nifty erased last two sessions of losses and stayed above the 12,000-mark for most of the session on Monday. Experts say that if the index continues to sustain above 11,920, it should be testing new all-time highs.
On Monday, NSE's Nifty 50 came close to its previously recorded all-time high of 12,089 (as seen on 3 June).