The benchmark Sensex on Friday surged 267 points in its best gain this month to end at record high of 28,334.63 after banking shares rose following Kotak Mahindra-ING Vysya deal, while hopes of big-bang reforms in upcoming Winter session of Parliament also boosted sentiments.
The NSE Nifty barometer also jumped 75.45 points to close at a fresh peak of 8,477.35 amid positive global cues after US shares provided another record-breaking lead on Thursday on the back of encouraging economic data.
Leading the rally on Friday were banking stocks on hopes of more mergers and acquisitions after Kotak Mahindra and ING Vysya on Thursday announced India's biggest banking merger.
ICICI Bank, HDFC Bank, SBI and Axis Bank together contributed almost 150 points to the Sensex kitty. Other eight banks from sectoral index S&P BSE Bankex also rose between 1.17 per cent and 4.01 per cent. Kotak Mahindra Bank scrip gained 3.7 per cent while ING Vysya Bank closed almost flat.
The S&P BSE benchmark Sensex resumed better and touched a life-time intra-day high of 28,360.66 before settling at new peak of 28,334.63 -- a rise of 267.07 points or 0.95 per cent.
This was its best daily gain since 519.50 points on October 31. Yesterday, it was up by 34.71 points or 0.12 per cent.
"...Indian markets have rallied on the back of positive news from India Inc and speedy cabinet approvals for development of India infrastructure," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
Investors are hopeful of "announcement of new reforms" in the upcoming Winter session of Parliament, which begins next week, stated Jayant Manglik, President-retail distribution, Religare Securities.
Railway wagon manufacturer stocks too were in keen demand on reports of orders for railway wagons. Cimmco was up by 19.96 per cent, Titagarh Wagaons by 10.96 per cent and Texmaco Rail by 5.25 per cent.
Globally, Asian stocks also rose on Friday after a report that China's central bank infused funds to ease a shortage of cash in the financial system, impacting positively on the local stocks.
The CNX 50-share Nifty also rose by 75.45 points or 0.90 points to end at all-time closing high of 8,477.35 after hitting a lifetime high of 8,489.80.
Meanwhile, Foreign Portfolio Investors (FPIs) sold shares worth Rs 477.15 crore yesterday, as per provisional data.
Mr. Jignesh Chaudhary, Head Of Research, Veracity Broking Services said,"Local indices again closed all time high on the investors' confidence with the help of some blue chips. Today banking stocks came to the party mainly after the step taken by the Kotak Mahindra Bank to buy its smaller competitor ING Vysya Bank."
Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan finished up between 0.14 pct and 1.39 pct. European stocks too were trading higher in their late morning deals. The CAC was up by 0.87 pct, the DAX by 1.08 pct and the FTSE by 0.50 pct.
Back home, 24 scrips out of the sensex pack ended higher while only 6 finished lower.
Major gainers were BHEL (3.00 pct), SBI (2.68 pct), Icici Bank (2.66 pct), Hindalco (2.63 pct), Axis Bank (2.17 pct), RIL (1.74 pct), HDFC Bank (1.62 pct), Larsen (1.42 pct), Cipla (1.37 pct), ITC (1.30 pct), M&M (1.19 pct), HDFC (1.17 pct), Tata Motors (1.11 pct), Hero MotoCorp (1.10 pct) and SSLT (1.02 pct) while Infosys fell by 1.79 pct followed by Tata Power 1.45 pct, Sun Pharma 1.03 pct, HUL 0.92 pct and Tata Steel 0.89 pct.
Among the S&P BSE sectoral indices, Bankex rose by 2.37 pct followed by CG 1.32 pct, Oil&Gas 0.86 pct and CD 0.84 pct.
Refecting fall in second-line stocks, the total market breadth remained negative as 1,635 stocks ended with losses, 1,375 closed with gains while 120 ruled steady.