The Sensex was higher by 450 points, while the Nifty gained 132 points at close. Among the top gainers apart from index heavyweights ITC and Reliance were Larsen and Toubro and Tata Steel.
Banking stocks also lent support to the indices with Axis Bank, ICICI Bank and HDFC Bank among the prominent gainers.
Non index banking stocks also gained ground with Bank of India, Union Bank of India, Yes Bank and Canara Bank among the winners.
Nifty stocks that lost ground in trade were Dr Reddy's Labs, Grasim, Tata Power and Sesa Sterlite.
Mid cap stocks also rallied in trade today with gainers from the space being Crompton Greaves which gained 4%, while other notable gainers were India Cements and Ashok Leyland.
Mastek dropped 6 per cent in trade today after the company said work with a North American company had been put on hold, which may impact revenues.
Hanung Toys lost ground after the company reported losses in the current quarter as against profits in the previous quarter.
Amar Raja Batteries on the other hand had a good session in trade after the company's net profits rose.
Meanwhile, markets in Asia ended the day sharply higher led by gains in the Hong Kong;s Hang Sang and the Chinese Shanghai Composite.