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 yesterday on the back of encouraging economic data.
Leading the rally today were banking stocks on hopes of more mergers and acquisitions after Kotak Mahindra and ING Vysya yesterday 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 percent and 4.01 percent. Kotak Mahindra Bank scrip gained 3.7 percent 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 percent. This was its best daily gain since 519.50 points on October 31. Yesterday, it was up by 34.71 points or 0.12 percent.
"...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 percent, Titagarh Wagaons by 10.96 percent and Texmaco Rail by 5.25 percent.
Globally, Asian stocks also rose today 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.

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