two months, while Nifty closed above the 19,400 level on value-buying in power, metal and oil stocks following strong domestic macro data and global cues.
The BSE barometer closed higher by 555.75 points or 0.86 per cent at 65,387.16 with 26 of its constituents ending in the green.
The index opened higher and later touched a high of 19,435.30 in day trading. It touched a low of 64,818.37.
The broader Nifty spurted by 181.50 points or 0.94 per cent to close at 19,435.30. As many as 44 Nifty stocks advanced while six declined.
NTPC was the lead gainer among Sensex stocks, rising by 4.84 per cent.
JSW Steel (3.37 per cent), Tata Steel (3.33 per cent), Maruti (3.24 per cent), Power Grid (3.07 per cent), IndusInd Bank (2.95 per cent), Bajaj Finance (2.12 per cent) and Tech Mahindra (2.22 per cent) were among major gainers.
On the other hand, Ultratech Cement, Sun Pharma, Nestle and L&T were the losers.
Vinod Nair, head of research at Geojit Financial Services said, "Domestic markets made significant gains, buoyed by favourable global cues, a higher-than-expected domestic manufacturing PMI, and positive GDP growth data."
This robust economic outlook propelled key manufacturing sectors to lead the rally, while strong sales figures generated increased interest in auto stocks, Nair added.
Official data released on Thursday showed that the Indian economy grew 7.8 per cent in the June quarter, mainly on the back of double-digit expansion in the services sector, and retained its position as the world's fastest-growing major economy.
In Europe, Britain's FTSE 100 rose 0.5 per cent, France's CAC 40 edged up nearly 0.1 per cent while Germany's DAX was little changed.
Gains in US futures supported the positive sentiment.
Dow futures was up 0.3 per cent and S&P 500 futures rose 0.2 per cent.
Among Asian markets, Japan's benchmark Nikkei 225 rose 0.3 per cent, South Korea's Kospi added 0.3 per cent and the Shanghai Composite added 0.4 per cent.
Global oil price benchmark Brend Crude futures surged 1.26 per cent to $87.92 per barrel.
On Thursday, Foreign Institutional Investors (FIIs) were net sellers of domestic equities as they offloaded shares worth Rs 2,973.10 crore, as per exchange data.
