The Sensex and Nifty hit their all-time highs in early trade three days ahead of the Narendra Modi government's last full year Budget.
Powered by a substantial rise in Maruti Suzuki stock on nod to agreement for lower payment of royalty, the indices rose to 36,410 and 11,161, respectively.
The Maruti Suzuki stock alone lifted the market by almost 370 points on its Q3 net profit announcement last week.
Maruti Suzuki was the top Sensex gainer rising up to 3.75% in early trade. TCS (2.83%) and Tata Steel (2.28%) were other major gainers on Sensex.
The auto sector was the highest gainer among 19 sectoral indices on BSE rising nearly 400 points.
Earnings upgrade is more likely after seeing the initial set of results but the current rich valuation and upcoming economic events may interrupt aggressive buying, said Vinod Nair, Head of Research, Geojit Financial Services.
On expectations from the Budget 2018-19, IIFL Partner and Head of Research Amar Ambani said, "In the last full Budget before the 2019 general elections, capital market investors would be keen to know of the governments stand on two critical issues: fiscal consolidation and tax burden on capital market investments."
At 10:25 am, the Sensex was trading 287 points higher to 36,337 level. The Nifty too rose 70 points to 11,143 points.
Market breadth was positive with 1336 stocks rising against 969 falling on BSE. 132 stocks were unchanged.
"Expectations are running high as it will be the first post-GST and last full-year Budget before the general elections in 2019. Markets expect government to follow fiscal prudence path and increase infrastructure and rural spending," said V K Sharma, Head Private Client Group and Capital Market Strategy, HDFC Securities.
Last week, the 30-share Sensex added 538.86 points, or 1.51 per cent; while the broader Nifty gathered 174.95 points, or 1.60 per cent.
Japan's Nikkei rose 0.5 percent as the yen eased a little, while South Korea notched a record.
Hong Kong's Hang Seng also rose 0.5 percent.In Europe, markets closed higher as earnings lifted the sentiments. UK economy grew by 0.5% during the last quarter.
US markets closed at record highs as corporate earnings beat estimates. Tech and health care were the best performers. US economy grew by 2.6% during the 4th quarter. FOMC interest rate decision on Wednesday.