Markets gained smartly in late-noon trades on the back of buying in IT stocks.
A positive closing for Asian markets and reports that the government has tabled some key reform bills in parliament this week, helped the index to end in the positive for the fourth straight day.
Wall Street had another good session with the sentiment rubbing on to the Asian bourses.
India dutifully latched on to the optimistic mood.
Asian markets jumped in trades with Nikkei gaining after two days.
The Japanese market moved up 1% to 9,536. Hang Seng and Shanghai Composite were up 1% each.
The Sensex after trading firm in the morning, shot up as IT stocks gained.
The BSE benchmark touched a high of 18,858 - up over 500 points from the previous close.
The index finally settled at 18,815 -- up 465 points. The Nifty ended up 132 points at 5,654 crossing the 5,600 mark after 14 trading days.
"The coming three-four months may turn out to be the best period for equity Investments since stock prices of many well managed companies have dropped sharply.," said Tejas Doshi, Vice President -- Research, Sushil Financial Services.
Broader markets were trading firm but could not manage to outperform the benchmark. The BSE mid and small-cap indices gained 1% each to 6,723 and 8,001, respectively.
All the sectoral indices ended in the positive.
BSE IT index surged on better-than-expected US tech earnings data.
The index rallied 3.6% to 6,321. Financial Technologies soared 7% to Rs 823.
Infosys gained 5.3% on reports that it may outperform TCS this year. Wipro and Oracle Financial Services were up around 3.5%