The 30-share index crossed the 35,000-mark by jumping 231.73 points or 0.66 per cent to 35,002.78, breaching its previous intra-day record of 34,963.69 hit on January 15.
It took 17 sessions for the index to reach the 35,000 mark from 34,000 level reached on December 26.
Strong gains in banking, IT, FMCG and capital goods stocks helped the index top new milestone.
Sentiments got a boost after the government on Wednesday lowered the additional borrowing requirement for the current fiscal to Rs 20,000 crore from Rs 50,000 crore estimated earlier, brokers said.
All sectoral indices, driven by IT, banking, PSU, capital goods and healthcare, with gains of up to 1.21 per cent.
The NSE Nifty spurted 61.15 points, or 0.57 per cent, to trade at 10,761.60.
Analysts said strong liquidity in the market following unabated buying by foreign funds inflows and encouraging Q3 earnings by some companies lifted the mood.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 693.17 crore while domestic institutional investors (DIIs) had sold equities worth a net Rs 246.38 crore on Tuesday, as per provisional data.
The big gainers that helped the flagship Sensex to new peak were SBI, Axis Bank, Infosys, Adani Ports, Yes Bank, ICICI Bank, L&T, TCs, ITC Ltd, Dr Reddy’s, Sun Pharma, Bajaj Auto, Power Grid, NTPC, HDFC Ltd, M&M and Tata Steel, surging up to 3.43 per cent.
Asian stocks were mixed, while European markets were down in their opening trade.