MUMBAI — Indian stocks reached a new high Monday, powered by foreign funds optimistic the country’s prime minister, Narendra Modi, will use his growing popularity to accelerate the pace of change and keep Asia’s third-largest economy expanding as much of the world struggles with slowdowns and uncertainty about how President Donald Trump’s policies will affect trade.

India’s bellwether S&P BSE Sensex 1, -0.57% broke a two-year-old closing record Monday as it rose to end trading at 29,910.22.