Stock markets opened for a special 90-minute Muhurat session to mark the festival of Diwali, considered an auspicious time for Indians.
The Sensex has been propelled by foreign inflows of around $3.5 billion since the Federal Reserve unexpectedly delayed tapering of its monetary stimulus.
The index rose to a record high of 21,321.53, surpassing the previous all-time high set just on Friday. It closed up 0.2 percent.
Hindustan Petroleum Corporation Ltd and Indian Oil Corp rose 3-4 percent while banking stocks Corporation Bank, Dena Bank and Indian Bank rose 2.6-15 percent.