Mumbai, Apr 3 (IANS): A day after the benchmark Sensex surpassed the 39,000-mark to hit an all time high, the Nifty index touched a record high of 11,761 during the early trade session on Wednesday.

Investor sentiments were upbeat over expectation that the Reserve Bank of India (RBI) may go for a rate cut in its upcoming Monetary Policy Committee (MPC) meet.

The outcome of the three day meet over the first bi-monthly policy statement for 2019-20 is scheduled for Thursday.

Both the major indices have been making strong gains over a sustained inflow of foreign funds and an expectation of a stable government after the polls.

After hitting its all-time high at 9.36 a.m., the Nifty at 1.30 p.m. was trading 28.95 points or 0.25 per cent higher at 11,742.15 nearly 20 points below the intra-day high.

Among the sectors which led the gains on the index were the auto, banking and finance stocks.

According to a report by the HDFC Bank, "low inflation has opened up room for the RBI to adopt a more accommodative stance to support faltering growth".

"So, the challenge for the central bank would now be to discern whether we have moved into a lower inflation bracket permanently or is this a temporary phenomenon."

Ratings agency ICRA also said in a report that it expected "a 25 bps rate cut in the upcoming meeting of monetary policy committee."