The 30-share index spurted by 333.64 points, or 0.87%, to hit a new peak of 38,585.44, breaching its previous high of 38,487.63 reached on August 23.
The gauge had lost 84.96 points in previous session on Friday.
All sectoral indices, led by metal, banking, consumer durables and PSU stocks were trading in the positive zone with gains of up to 1.52%.
The 50-share NSE Nifty rallied 94.40 points or 0.82%, to scale its lifetime high of 11,651, bettering its previous intra-day high of 11,620.70 touched on 23 August.
Positive leads from other Asian markets tracking weekend gains on the Wall Street after comments from US Federal Reserve Chairman in support of a gradual approach to raising rates bolstered trading sentiments here, brokers said.
Prominent gainers include Yes Bank, Tata Steel, ICICI Bank, SBI, Kotak Bank, PowerGrid, Bharti Airtel, Axis Bank, Tata Motors, IndusInd Bank, RIL, and Vedanta, rising up to 2.24%.
Meanwhile, domestic institutional investors (DIIs) bought shares worth a net of Rs 904.75 crore on Friday, while foreign portfolio investors (FPIs) sold shares worth a net of Rs 75.78 crore, provisional exchange data showed.
Among other Asian markets, Hong Kong’s Hang Seng gained 1.87% and the Shanghai Composite Index rose 1.21% in their early deals. Japan’s Nikkei too edged higher by 0.79%.
The US Dow Jones Industrial Average closed 0.52% higher on Friday.