The BSE 30-share index zoomed 553.42 points or 1.39% to close at 40,267.62 on Monday. During the trade, it advanced 594.7 points to 40,308.90, its lifetime peak.
The broader NSE benchmark also surged 165.75 points, or 1.39%, to settle at 12,088.55.
Led by the sharp rally in the equity market, the market capitalisation (m-cap) of BSE-listed companies surged ₹1,76,402.37 crore to ₹1,56,14,416.92 crore, PTI reported.
Here are the five reasons why the indices rose to a record high.
Auto, FMCG, IT and realty sectors shine
"Today auto, FMCG, IT and realty pulled the market to a new all-time high as they are trying to catch up the rally on the back of expected rate cut by RBI and increase in demand from domestic sectors," CapitalAim Head of Research Romesh Tiwari told PTI.
RBI rate cut is coming?
The RBI's Monetary Policy Committee (MPC) is slated to announce its bi-monthly policy Thursday. The market is expecting RBI to cut policy rate by 25 bps and that means more spending power for the consumers.
"In its forthcoming policy review on 6 June, 2019, we expect the RBI to cut policy rate by 25 bps. We also see a good chance of the policy stance shifting to accommodative/dovish (from neutral currently)," Edelweiss Research said in a report.
27 of 30 BSE stocks gain
From the 30-share pack, 27 stocks closed with gains led by Hero MotoCorp, Bajaj Auto, IndusInd Bank and Asian Paints.
All BSE sectoral indices ended in the green, with auto, energy, metal, tech and finance rallying up to 1.93%. In the broader market, BSE mid-cap and small-cap indices rose by up to 0.90%.
Indian markets buck global trend
Dow Jones closed the previous trading day in red with a 1.4% decline but Indian bourses continued to show strength and opened in green on Monday. Analysts say Narendra Modi's second term got the animal spirits back into the equities and that too in a big way.
Weak macros not an issue, as yet
"Despite the weak macros and domestic factors, Nifty and Sensex crossed milestone levels and rallied up," Samco Securities Head of Research Umesh Mehta told PTI.