The 30-share Sensex ended the day at nearly two-week high of 20,850.74, up 451.32 points or 2.21 per cent amid hopes of US Fed sticking to its stimulus programme and optimism over Chinese reforms.
This was the biggest single-day gain for Sensex since October 18 when it rose by 467.38 points.
The broader NSE's Nifty settled the day with a gain of 132.85 points at 6,189.
Today's rally was fuelled by easing fears on US Fed's quantitative easing after Fed chief nominee Janet Yellen bolstered expectations of keeping the flow of easy money intact.
Following the robust sentiment in the stock market, the total investor wealth soared by Rs 1,05,802 crore to Rs 67,94,300 crore.
"Positive global cues, optimism from the US that they are not in hurry to taper stimulus program and also a stronger Rupee fuelled the rally today," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Limited.
Among the 30-Sensex components, 26 ended the day with gains, led by HDFC Bank that rose by 4.15 per cent.
All the 13 BSE sectoral indices ended the day in green, with Capital Goods index leading the chart with 3.19 per cent gain.
Participating in the market rally, 1,403 scrips advanced for the day, while 1,057 stocks declined and 126 remained unchanged.