Higher rollovers on an absolute basis coupled with high roll cost during the expiry of March derivative contracts also lent support and indicates market participants are bullish for the April series.
The Reserve Bank of India's policy review on April 1, is expected to keeps rates unchanged, investors say the forthcoming general elections would act as the next key catalyst for markets.
fii'S have helped underpin gains, with net purchases in shares reaching $2.75 billion so far this month, according to sebi data.
The Nifty rose as much as 1.1 percent to an all-time high of 6,673.95, while the Sensex gained 0.96 percent to a lifetime high of 22,307.74.The Sensex closed 0.54 percent higher, while the Nifty ended up 0.61 percent.
Shares in PSU banks gained after Goldman Sachs upgraded the stocks, saying neglected lenders are poised for a rally on emerging macroeconomic and political clarity.State Bank of India rose 3.9 percent, Punjab National Bank ended higher 3.8 percent, and Bank of Baroda gained 2.4 percent.Non-banking state-run infrastructure lender IDFC Ltd also rose 5.2 percent.
Reliance Industries gained 1.1 percent, while ITC ended 0.2 percent higher.Airline shares gained after the central bank on Wednesday extended the deadline for raising working capital via external commercial borrowings by domestic airlines to March 2015 from December 2013.
Jet Airways (India) Ltd gained 2.6 percent, while SpiceJet Ltd surged 3.5 percent.
Talwalkars Better Value Fitness Ltd surged as much as 12.8 percent to 182.40 rupees, its highest in more than 13 months, after the Economic Times daily reported UK health and fitness group The David Lloyd is looking to buy around 20 percent in the company.The stock ended 8 percent higher after the company said in a clarification to exchanges that there have been no negotiations for sale of any equity.
However, exporters continued to fall on fears of margin erosion as the rupee was holding around its eight-month high.
Among pharmaceutical exporters, Sun Pharmaceutical Industries Ltd fell 1.1 percent and Dr.Reddy's Laboratories Ltd lost 1.7 percent.In IT. stocks, Infosys Ltd fell 0.55 percent and HCL Technologies Ltd ended 0.6 percent lower.