After a higher start at 24,308.40, the Sensex rose further to quote at 24,634.13, up 416.79 points, or 1.72per cent, at 1435 hrs as stocks of capital goods, PSUs, banking, oil and gas, power and auto sectors led the rise.
The broad-based National Stock Exchange index Nifty also spurt by 111.05 points, or 1.54 per cent, to 7,341.00 after rising to 7,255.30 in early trade.
Brokers said the trading sentiment turned better after foreign funds and retail investors accelerated their buying activity on rising hopes that the government will announce measures to revive country's economic growth.
Strong earnings by Larsen & Toubro (L&T) and the country's largest car-maker posting encouraging sale numbers for May too buoyed the trading sentiments, they said.
Firming trend on the other Asian markets after a gauge of China's manufacturing expanded at the fastest pace in five months, too had a positive impact, they added.
Foreign institutional investors (FIIs) bought shares worth a net Rs 2,977.62 crore last Friday, as per provisional data from the stock exchanges.
Stock of Maruti Suzuki rose 1.97 per cent to Rs 2,314.10, while Larsen and Toubro gained rose over 4 per cent to Rs 1,611.85.