Besides, a mixed trend at other Asian markets influenced trading sentiments.
The 30-share index, which had lost 47.25 points in the previous session, recovered by 159.33 points, or 0.57 percent, to a new peak of 28,027.96 with all sectoral indices, led by FMCG, healthcare, metal and consumer durables gaining up to 1.43 percent.
The National Stock Exchange index Nifty also gained 46.05 points, or 0.55 per cent, to trade at a new lifetime high of 8,383.05.
The BSE Sensex had recorded its earlier intra-day high of 28,010.39 and the Nifty clocked its peak of 8,365.55 on November 5.
Brokers said sustained foreign funds inflow and widespread buying by investors on hopes of acceleration in economic reforms process after Prime Minister Narendra Modi expanded his Council of Ministers, mainly buoyed trading sentiments, lifting key indices to new highs.

Meanwhile, Finance Minister Arun Jaitley said on Sunday the government will amend the tough land acquisition law.
Among other Asian markets, Hong Kong's Hang Seng rose by 2.23 percent, while Japan's Nikkei was down by 0.72 percent in morning trade on Monday.
US Dow Jones Industrial Average ended 0.11 percent higher in Friday's trade.

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