Mumbai - Indian shares ended Wednesday at their highest-ever closing level, beating the previous record set in 2010, on strong foreign fund inflows and an easing of global concerns.
The Bombay Stock Exchange benchmark Sensex index closed up 0.50% or 104.96 points at 21 033.97 points, led by telecom and banking stocks.
The index's previous highest close was 21 004.96 on November 5, 2010.
Sentiment has been improving across Asian markets on hopes that the US central bank will not start tapering off its massive stimulus programme until the new year.
The Federal Reserve is expected to announce its decision on tapering plans after its two-day meeting ends later on Wednesday.
India's markets had been hit this year by an outflow of foreign funds over fears of the US programme ending. India's slowing economic growth, weak rupee and high trade deficit also weighed on the market.
But with global and domestic fears beginning to ease, investments are starting to flow in again.
Foreign funds have pumped $2.38bn into Indian equities so far this month, taking their total purchases to $16.03bn for 2013, regulatory data shows.
"Indian equities are rallying on strong foreign investor flows. The stability of the rupee has also eased investor concerns," said Hemen Kapadia, vice-president with K.R. Choksey Shares and Securities.
The appointment of noted economist Raghuram Rajan as India's new central bank governor last month appears to have helped, analysts said.
Rajan, a former IMF chief economist, has outlined a plan to boost investor confidence, fight high inflation and support the ailing rupee.
The rupee, which was one of the worst performing Asian currencies this year, is starting to stabilise, gaining over 10% against the dollar in recent weeks from its record low of 68.85 in August.