Benchmark indices surged in trade, as Bank of Japan kept interest rates negative and oil prices rebounded in trade.
Most Asian markets rallied sharply in trade with Europe also trading higher, on hopes that leading producers would cut oil production, which could lead to a further spike in oil prices.
The Japanese Nikkei also led gainers in Asia today after the Bank of Japan kept interest rates negative. The Sensex ended the day with gains of 401 points, while the Nifty rallied 138 points in trade.
ICICI Bank, which fell sharply to a low of Rs 216 in trade, dropping 6 per cent at one stage in trade, showed a remarkable recovery, to end just a per cent lower.
Metal and mining companies led gainers in trade with Vedanta and Coal India being one of the biggest gainers in trade.
Shares in Maruti fell after the company reported performance that lagged estimates. State Bank of India was the biggest loser from the Nifty space, as investors worried over the company's provisions ahead of results next month.
Pharma stocks saw good buying support in trade with Dr Reddy's and Sun Pharma both gaining ground in trade. Heavyweights like ITC, Reliance and Infosys also lent support to the markets in trade.
Meanwhile, European markets were all trading higher, following robust cues from Asia.