The Sensex closed above the 26,000 points mark, led by sharp gains in IT Stocks and a rebound in metal names.
The Sensex ended the day with gains of 328 points, while the Nifty jumped 107 points in trade. Leading the set of gainers was Hindalco, which rallied 5% after the company said that Metals X Ltd conditionally intends to increase its offer for subsidiary Aditya Birla Minerals Ltd.
Godfrey Philips was the biggest loser in trade today after reports that the government was looking to ban FDI in the tobacco sector. The stock ended 17 per cent lower in trade.
ITC, which had shed as much as 1 per cent in early trade after the likely tobacco ban reports gained ground and ended the day higher.
Meanwhile, markets across Asia ended the day mixed ahead of the US Fed Policy statement.