ONGC shares surged 10.57 per cent to close at Rs 464. The stock jumped 11.5 per cent intra-day to Rs 467.95 -- its 52-week high level on the BSE. ONGC was the top gainer among blue-chips on both Sensex and Nifty.
Shares of Reliance Industries (RIL) climbed 2.97 per cent, while Cairn India gained 2.31 per cent.
"Oil & gas stocks were in demand and pushed the index upwards. The oil ministry is likely to take decision on gas pricing by month's end which generated renewed buying in the sector," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
The government is likely to hike natural gas rates from July 1 after a new price formulation is approved by the Cabinet, a top Oil Ministry source had said yesterday.
Among others, Gail India soared 7.52 per cent, Oil India Ltd rose by 3.64 per cent, while Indraprastha Gas Ltd (1.97 per cent), Hindustan Petroleum Corp Ltd (1.96 per cent), Bharat Petroleum Corp Ltd (1.74 per cent), Indian Oil Corp Ltd (1.72 per cent) and Petronet LNG Ltd (1.54 per cent) also posted gains.
The BSE's oil and gas index ended 4.82 per cent up at 11,987.67, registering the biggest gain among 13 sectoral indices.
ONGC and RIL together contributed 184.77 points to the overall market gain as the benchmark Sensex ended at 25,396.46 points, up 376.95 points or 1.51 per cent.