The Sensex, which had recorded a handsome gain of 493 points in the last two trading sessions, added another 63.58 points at 9,647.47, after touching the day's high of 9,724.87.

The 50-share National Stock Exchange index Nifty rose 14.60 points to 2,934.50. It scaled to a high of 2,957.40 during the day.

The rally was driven by banks, and interest-sensitive sectors like realty and auto on reports that the Reserve Bank of India might cut interest rates to spur the economy.

Foreign funds bought fundamentally strong shares ahead of the US economic rescue plan, to be announced later tonight.

The realty sector index gained the most, by 6.58 per cent, to 1,536.13, on hopes that interest rate cuts might bolster demand for homes. Shares in real estate firm Unitech Ltd rose 9.45 per cent to Rs 31.85, after the company said it expects to receive a new business from Telenor this quarter.

The second major DLF Ltd surged by 9.05 per cent to Rs 152.50.