The gains were led by financials, capital goods and index heavyweight Reliance Industries.
The Sensex closed for the day at 18753, up 403 points and the Nifty gained 137 points to close at 5,691.
During the previous high, the BSE benchmark index had ended at 18,763 on July 1, 2012 while the Nifty closed at 5,701 on May 1, 2011.
The broader markets underperformed with the midcap and the smallcap indices up 1.6% and 1.4% respectively as compared to the Sensex up 2.2%
Keeping up its reforms commitment, Finance Minister P. Chidambaram announced that the withholding tax on overseas borrowing by local companies will be reduced to 5% from 20%.
Asian markets ended on a positive note in trades today as stimulus measures from major central banks continued to buoy investor confidence, offsetting weak economic data. Japan's Nikkei advanced 0.3% to close at 9,110, Hang Seng added 0.7% and Shanghai Composite was flat with a positive bias.
The European markets too started in the green with the CAC and DAX gaining 0.4% and 0.3% respectively. Meanwhile, FTSE slipped into the red, losing 0.1%
Except, IT, all the other sectoral indices on the BSE ended higher. Power, Capital Goods, Metal and Bankex indices which advanced 4%
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