The market got a boost from metal and mining stocks, which surged for a third straight session after positive manufacturing data from China earlier this week aided sentiment.

The Sensex gained 213 points, or 0.9 per cent over its previous close, to end the day at 25,019. The National Stock Exchange’s Nifty closed at 7,474, up 72 points or 0.9 per cent. Both indices hit new all-time closing highs. (MARCH TO TOP)

Metal stocks gained the most on Thursday, with Sesa Sterlite shares rising 6.50 per cent on the BSE. The stock was the top gainer among Sensex firms. Among other gainers were Hindalco Industries, Hindustan Unilever, Tata Power and Tata Steel.

Experts believe the market might continue to remain in the positive zone over hopes of a favourable monsoon and a revival in the economy.

The European Central Bank’s (ECB’s) decision to cut interest rates, likely to open a new gush of liquidity, would be another shot in the arm for Indian stocks, analysts said. ECB, which on Thursday became the first major central bank to bring rates in the negative zone, said it would take additional measures to boost the economy. European stocks responded well to the ECB announcement.

“I believe a new, strong and decisive government will kickstart the economy and push the reform process very aggressively. Lots of things are already visible on the ground,” said Motilal Oswal, chairman & managing director of the eponymous firm.

The Sensex, which climbed above the 25,000 mark during intra-day trading on May 16, took 14 days to move from the 24,000 to 25,000.

Analysts said the important break-out came after a consolidation in the past two weeks that was important as the market had been rallying sharply since February in anticipation of a stable government, while robust foreign inflows had also helped.

FIIs on Thursday pumped in Rs 1,368 crore, according to provisional data from the exchanges. So far this year, FII flows into the Indian market have topped $8 billion — one of the highest among emerging markets.

“We remain confident that India’s new government will deliver on its economic agenda, which should in turn drive equity returns,” said Abhay Laijawala, MD & head of research (India) at Deutsche Bank, which expects the Sensex to rise beyond 28,000 by December this year.

Analysts said the monsoon progress and Budget announcements would be the next big triggers for the market.

Positive flow of news on these could help the Indian market continue to outperform other emerging markets, they said. Rising 18.1 per cent, the Indian market has been one of the best-performing emerging market so far in 2014.

Following the sharp rally, India now trades at a valuation higher than its long-term averages and has been re-rated by many brokerages. Investor interests have also shifted to small- and mid-cap stocks, which are outperforming their larger peers. On Thursday, the BSE Smallcap index gained 1.42 per cent, while the BSE Midcap was up one per cent. Sesa Sterlite, Hindalco and Tata Steel were among the top five Sensex gainers on Thursday, eaching gaining more than 3 per cent.