The benchmark Sensex ended 5.37% higher on Wednesday, 10 December on selective buying by foreign funds.
The 30-share BSE index gained 492.28 points at 9,162.62 points, rising on realty and capital stocks earlier in the day.
The wide-based 50-issue National Stock Exchange Nifty NSE index rose to 2,928.25 points.
Buying sentiment in the market has prevailed since government announced measures to boost Indian economy on Sunday. Reserve Bank of India also further announced interest rate cut by 100 base points.
Realty sector led the rally by 12.56%, followed by metal and oil and gas that surged 8.38% and 6.97% respectively.
DLF topped the list of gainers rising 18.93% to Rs41.80, followed by Mahindra and Mahindra (15.47%, Rs38.40), Garsim Industries (13.66%. Rs132.05), Tata Steel (10.92%, Rs21.40) and Reliance Communication Limited (10.24%, Rs21.20).
Meanwhile Asian stocks rallied more than 3% as US reached tentative deal on the bailout plan for auto industry in crisis. Hong Kong’s share index Hang Seng closed 5.6% higher, where as Nikkei rose 3.2% to hit a one-month closing high.