India's key share market index touched a new all-time high Thursday, extending gains to the third consecutive session, on large-scale buying in technology stocks following the bagging of a major contract by two local firms.

Mirroring the bullish investors' sentiment, the stock market barometer 30-share Bombay Stock Exchange (BSE) sensitive index or Sensex closed at 7,876.15, representing a gain of 70.72 points or 0.91 percent over its previous session's close.

The market index bettered its previous record high of 7,859.53 reached Aug 17 on across the board buying interest.

India's blue chip equities had soared sharply during the past few weeks on massive inflows of overseas funds and hope that a normal monsoon would boost economic growth in the current year.

Dealers said that the stock market opened with a positive gap, after rising nearly one percent in the previous session, on sustained institutional buying interest in heavyweight equities.

Blue-chip equities staged a smart rally in the early trade after steel makers announced a price hike.

The market sentiment got a major boost in the second half of the trading session after it was announced that Infosys Technologies and Tata Consultancy Services have bagged a major tech outsourcing deal.

Infosys Technologies has bagged a five-year multi-million euro contract from ABN AMRO to develop, support and enhance a wide spectrum of banking applications for the Dutch global bank.

Infosys company-secretary V. Balakrishnan said out of the total euro 1.8-billion ($2.23 billion) deal, Infosys' share was euro 108 million ($140 million), with a potential to go up to $250 million over the next five years.

Tata Consultancy Services, the other Indian IT bellwether, which also bagged a part of the contract, will have a business of $260 million (euro 200 million) from the outsourcing project.

The US-based global IT major IBM won a major portion of the deal.

"The deal has really come as a major boost for the domestic technology sector that has not seen many big outsourcing contracts in the last few quarters," said an analyst with a domestic brokerage firm.

Shares of Tata Consultancy Services rose nearly one percent to Rs.1,419.25 and Infosys Technologies jumped 2.1 percent to touch Rs.2,426.75 on fresh institutional buying interest.

In the old economy sector, shares of two-and-three wheeler maker Bajaj Auto closed with a gain of 2.5 percent at Rs.1,450 after the company said total vehicle sales in August rose 34 percent to 186,802 units.