Market benchmark BSE Sensex surged over 293 points to hit its record intra-day high of 40,344.99 led by rally in index heavyweights Infosys, SBI, HDFC Bank and TCS.
After opening on a strong note, the 30-share index was trading 263.69 points, or 0.66%, higher at 40,315.56 in morning session. The broader NSE Nifty too advanced 71.85 points, or 0.61%, to 11,915.95.
Top gainers in the Sensex pack included SBI, Infosys, Tata Motors, Yes Bank and Sun Pharma, rising up to 4.35%.
On the other hand, M&M, Tata Steel, TechM, PowerGrid and Axis Bank fell up to 1.09%.
According to experts, hopes that the government will cut long term capital gain tax, dividend distribution tax and the securities transaction tax enthused domestic investors.
Massive foreign fund inflow too boosted investor sentiments, traders said.
Foreign institutional investors purchased a whopping Rs 7,192.42 crore in the capital market, on Wednesday, while domestic institutional investors sold shares worth Rs 185.87 crore, data available with stock exchange showed.
Improved auto sales growth during the festival sessions, good quarterly results too added fuel on Dalal Street, traders said.
Bourses in Hong Kong, Seoul and Tokyo were trading on a positive note, while those in Shanghai were in the red.
The rupee, meanwhile, appreciated 10 paise against the US dollar to trade at 70.80 in early session.