In volatile trading, the benchmark BSE Sensex today rebounded by over 90 points to end at fresh closing high of 23,905.60, ahead of the much-awaited outcome of Lok Sabha elections.
Easing April inflation data before the RBI's monetary policy review on June 3, also boosted sentiment.
Stock markets had opened on a strong footing with the 30-scrip Sensex touching the day's high of 23,971.78 points in early trade. However, some profit booking in realty, capital goods, IT, metal, healthcare and auto shares pulled the index down to a day's low of 23,742.75 points.
The BSE barometer finally closed at a new closing high of 23,905.60, up 90.48 points, or 0.38 per cent, as fag-end buying in heavy-weights emerged.
The gauge had lost 56.11 points in the previous session to fall from its previous record closing high of 23,871.23.
Seventeen Sensex stocks rose while 13 ended lower.
Shares of Tata Steel, after touching a 52-week high of Rs 468, closed 1.89 per cent up at Rs 460.70 after the firm reported consolidated net profit of Rs 1,036 crore for the fourth quarter ended March 2014.
Other major gainers were Reliance Industries (RIL), Infosys, ONGC, NTPC, Axis Bank, GAIL, HDFC, HDFC Bank, Hindustan Unilever, ITC, Mahindra and Mahindra, Maruti and Tata Power.
The 50-share Nifty index of the National Stock Exchange also ended 14.40 points, or 0.20 per cent, higher at new closing peak of 7,123.15. During the session, NSE Nifty shuttled between 7,152.55 and 7,082.55.
Nifty's previous closing high was 7,108.75.
Investors and foreign funds, who were seen booking profits in late afternoon trade, started accumulating stocks helping indices end in the positive territory. Exit polls have projected that BJP will emerge as the single largest party.
Brokers said easing inflation which fell to 5.2 per cent in April from 5.7 per cent in March helped steady market mood.
Besides, the rupee, which soared to almost 10-month high against the US dollar, also had a positive impact, they said.
Among sectoral indices, BSE Consumer Durables gained the most by rising 1.52 per cent, followed by Power index (0.97 per cent), Oil and Gas index (0.95 per cent) and PSU index (0.42 per cent). However, the BSE Realty sector index fell the most by losing 1.11 per cent, followed by Capital Goods index (0.90 per cent).
Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities: The market continued to be range-bound