Persistent buying and foreign fund inflows offset the impact of global volatility sparked by US President Donald Trump's unexpected firing of the FBI chief, brokers said.
It finally ended 76.17 points, or 0.25 per cent higher at 30,658.77, surpassing its previous record close of 30,582.60 hit yesterday.
The gauge has now gained 470.62 points in three consecutive sessions.
The index overtook its previous lifetime high of 9,512.25 hit yesterday.
"Market continued to set new highs but lacked strength on the upside due to worries about US political turmoil.
"Investors are gearing up for the two-day GST council meet beginning tomorrow for getting clarity on rates... continued buying from FIIs and announcement of good quarterly results is keeping a positive vibe in the market," said Vinod Nair, Head of Research, Geojit Financial Services.
Continuing their purchasing spree, foreign portfolio investors (FPIs) bought shares worth a net Rs 858.29 crore yesterday, as per provisional data from the stock exchanges.
In Asia, Hong Kong's Hang Seng fell 0.17 per cent, Japan's Nikkei shed 0.53 per cent, while Shanghai Composite finished 0.27 per cent lower.
London's FTSE fell from its record closing due to political uncertainty in the US.
In the Eurozone, Frankfurt's DAX slid 0.80 per cent while the Paris CAC 40 lost 0.6 per cent in early deals.
Back home, Tata Steel soared almost 8 per cent after the company reported narrowing of its net loss for the March quarter.
A total of 17 shares in the 30-share Sensex pack ended higher.
Major gainers were Tata Steel 7.95 per cent, Tata Motors 2.82 per cent, ICICI Bank 2.35 per cent, TCS 0.99 per cent, Asian Paints 0.88 per cent, M&M 0.86 per cent, HUL 0.82 per cent, L&T 0.59 per cent, Hero Motoco 0.58 per cent and Lupin 0.51 per cent.
However, Wipro fell by 1.70 per cent followed by Adani Ports 1.40 per cent, Cipla 0.94 per cent, HDFC 0.89 per cent, ITC 0.56 per cent, Gail 0.56 per cent and ONGC 0.54 per cent.
Among BSE sectoral indices, metal rose 2.37 per cent followed by telecom 0.89 per cent, auto 0.57 per cent, industrials 0.32 per cent and capital goods 0.22 per cent.
Consumer durables lost 0.76 per cent, oil&gas 0.37 per cent, healthcare 0.30 per cent, energy 0.25 per cent and IT 0.22 per cent.
The S&P BSE Mid-Cap index was off 0.02 per cent while the Small-Cap index slipped 0.18 per cent. Both these indices underperformed the Sensex.
The market breadth turned negative as 1,531 stocks ended lower, 1,269 closed higher while 172 ruled steady.
The total turnover on BSE rose to Rs 6,808.38 crore, from Rs 4,985.91 crore registered during the previous trading session.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)