The passing of the GST bills in the Lok Sabha led to the benchmark Nifty closing at an all-time high of 9,173.75 while the Sensex rose for the third straight session on Thursday on optimism surrounding amid expiry of derivatives contracts.
The Lok Sabha on Wednesday cleared four GST legislations to pave the way for the rollout of the new indirect tax regime from July 1, boosting market sentiment.
Sustained foreign capital inflows and covering up of short positions on the last trading session of March series derivatives contracts supported the momentum, traders said.
The 50-share NSE Nifty edged higher by 29.95 points, or 0.33 per cent to a record closing of 9,173.75 after hovering between 9,183.15 and 9,136.35.
This is Nifty's highest closing since March 17, when it had ended at 9,160.05. The 30-share Sensex, after touching the day's high of 29,684.54, succumbed to profit-booking and hit a low of 29,521.65 before settling 115.99 points, or 0.39 per cent higher at 29,647.42.
The gauge had gained 294.28 points in the previous two sessions.
"Market sentiment got a boost after the Lok Sabha yesterday passed four bills relating to the implementation of the Goods and Services Tax (GST)...," said Karthikraj Lakshmanan, Senior Fund Manager Equities, BNP Paribas Mutual Fund.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 460.98 crore yesterday, as per provisional data released by the stock exchanges.
Logistics stocks saw increased buying after the GST legislations were cleared by the Lok Sabha.
Shares of Arshiya Ltd, Allcargo Logistics, Transport Corp of India, Blue Dart Express, Snowman and Container Corp of India ended higher by up to 4.98 per cent.
Adani Ports was the top performer in the Sensex pack, surging 5.77 per cent to Rs 338.85, followed by HDFC Bank (2.51 per cent to Rs 1,463.75).
Other gainers included Bharti Airtel, GAIL, RIL, Wipro, Cipla, SBI, HUL and L&T, gaining up to 1.67 per cent.
Auto stocks, including M&M, Hero MotoCorp, Maruti Suzuki and Ashok Leyland, recovered on value buying, a day after recording steep losses following the Supreme Court's decision banning sale and registration of BS-III vehicles from April 1.
The broader markets too were in a better shape as investors widened their bets, lifting the BSE small-cap index by 0.95 per cent and mid-cap index by 0.39 per cent.
Sector-wise, realty gained the most by rising 2.17 per cent, followed by consumer durables (1.38 per cent), bank (0.82 per cent), capital goods (0.55 per cent) and power (0.37 per cent).
Market breadth turned positive as 1,739 stocks ended higher, 984 declined, while 232 ruled unchanged.
The total turnover fell to Rs 4,606.56 crore from Rs 14,854.52 crore. Globally, other Asian markets saw a lower trend, with Japan's Nikkei falling 0.80 per cent, Hong Kong's Hang Seng losing 0.37 per cent and Shanghai Composite Index shedding 0.96 per cent.
European stocks were slightly better in their early trade with London's FTSE rising 0.12 per cent, Paris CAC up 0.10 per cent and Frankfurt gaining 0.11 per cent.