The BSE Sensex surged over 1,400 points to a new record high as the BJP-led National Democratic Alliance headed for a big win in the 16th Lok Sabha elections. The Sensex crossed the psychological 25,000 for the first time. (Track markets)

The 50-share Nifty surged over 400 points to an all-time high of 7,553.90. Meanwhile, the Indian rupee traded at a 10-month high of 58.63 per dollar. (Read: RBI Spotted Buying Dollars to Halt Rupee Gains: Report)

According to latest trends, Narendra Modi-led NDA is leading in 325 seats, wining 184 more seats as compared to 2009 elections. The BJP is likely to get a majority on its own as the opposition party is leading in 272 seats. The Congress-led United Progressive Alliance was leading in 69 seats, down 165 seats from last elections. (Live blog on markets)

"This is the best thing that could have happened for the market, we couldn't have asked for anything better than this. I think this is the beginning of a new growth cycle of India, this is the beginning of new bull market," Pankaj Murarka of Axis Asset Management told Reuters.

(Also read: Markets in a Romantic State on Modi's Triumph: Experts)

Indian stock markets have been on a roll on hopes that a stable government post elections in May would pull out all stops to bring the country's sluggish economy on track. Analysts expect a revival in investment cycle and fast-tracking of reforms under the new regime.

The rally in markets has come on the back of strong buying by overseas investors. Foreigners betting on a BJP victory have poured more than $16 billion into Indian stocks and bonds in the past six months and now hold over 22 per cent of Mumbai-listed equities - a stake estimated by Morgan Stanley at almost $280 billion.

Banking stocks led the bull charge on the Dalal Street, up around 10 per cent. Energy, auto, consumer durable and capital goods stocks traded with over 5 per cent gains.

On the Nifty, 43 of the 50 stocks traded higher. Private lender ICICI Bank surged nearly 12 per cent and was the top Nifty gainer followed by two-wheeler major Hero MotoCorp. State-run Punjab National Bank was up 11 per cent. (Track top gainers and losers)

However, IT stocks fell sharply after the rupee gained over 1 per cent against the dollar.

Gujarat-based companies saw strong buying as BJP headed for victory in elections. Adani Enterprises was up 9 per cent, Adani Ports traded 3.5 per cent higher, while Adani Ports traded with 5.3 per cent gains. (Read full story here)