Stocks in petrochemicals and metals firms have fuelled the surge

It comes a month after Indian shares broke through the 11,000 barrier, and on the back of strong economic growth and overseas investment in India.

The benchmark Sensex closed at a record high of 12,039.76 points, up 143.78 points or 1.21% on the previous close.

The Indian stock markets have touched one record high after another since last year.

'Bull run'

As well as foreign investors, stock market purchases by Indian investment funds and individual investors have also steadily increased.

The Sensex surge was led by heavy buying in petrochemical major Reliance after reports that it had struck new oil reserves in the Krishna-Godavari basin in western India.

Other metal stocks such as Tata Steel and Hindustan Zinc also did well and helped sustain the climb.

Krishna Kumar Karwa, managing director of stock broking firm Emkay, said: "This time around, it is the individual investor who is buying in the market because if you look at the numbers, foreign and domestic fund buying has not been very strong lately.

"They are trying to make the best of the bull run while it lasts."