Sensex rally was driven by Bajaj FinServ, Reliance, Bajaj Finance, ICICI Bank, HDFC and Axis Bank.
NSE Nifty climbed 326.50 points to end at 15,245.60.
Continuing their winning run for the third session in a row, the BSE Sensex surged nearly 1,148 points to breach the 51,000-level and the NSE Nifty recaptured the 15,200-mark on Wednesday, propped up by intense buying in financial and energy stocks.
At the closing bell, the 30-share Sensex was up 1,147.76 points or 2.28 per cent at 51,444.65 -– the biggest single-day rise since February 2. Intra-day, the index swung 1,243 points.
Likewise, the NSE Nifty climbed 326.50 points or 2.19 per cent to end at 15,245.60 with 43 of its constituents closing in the green.
Over the last three sessions, the Sensex has risen by 2,344.66 points or 4.77 per cent while the Nifty has added 716.45 points or 4.93 per cent.
The Sensex rally was driven by Bajaj FinServ, Reliance Industries, Bajaj Finance, ICICI Bank, HDFC and Axis Bank.
Of the 30 Sensex constituents, 27 closed in the green.
Bajaj Finserv rose the most by 5.15 per cent.
Reliance Industries rose by 4.52 per cent a day after its telecom arm emerged as lead buyer in spectrum auctions.
Reliance Jio picked up 488.35 MHz of spectrum in bands such as 800 MHz, 1800 MHz and 2300 MHz for Rs 57,122.65 crore.
Analysts said strengthening of spectrum footprints by Bharti Airtel and Reliance Jio in the auctions is expected to yield market share gains for the two telcos.
Bharti Airtel, which bid about Rs 18,699 crore to pick up 355.45 Megahertz, rose by 0.92 per cent.
"Markets across the globe were filled with optimism as the focus shifted from concerns over high valuation to a stronger economic recovery and earnings growth.
“The Indian market was on a rising streak echoing the global sentiment," Vinod Nair, Head of Research at Geojit Financial Services said.
Meanwhile, a monthly survey said that India's services activity expanded at the fastest rate in a year during February amid improved demand and more favourable market conditions.
Bourses in Paris, London, Tokyo and Shanghai advanced as investors took heart from an easing in bond yields that has alleviated worries over possible interest rate hikes. The yield on the 10-year Treasury inched down to 1.40 per cent early Wednesday.
Foreign investors had bought equities worth Rs 2,223.16 crore on net basis in Indian capital markets on Tuesday, exchange data showed.
Sectorally, all indices closed with gains barring auto.
BSE energy surged 3.74 per cent, metal climbed 3.23 per cent, finance rose 2.80 per cent and bank gained 2.75 per cent.
The nifty bank which had a rough week so far took a breather and led the rally while consolidation was seen on auto stocks.
In the broader market, smallcap, midcap and largecap indices underperformed the benchmark.
"A stellar rally across BFSI & Metals powered Indices higher today by 2.3% with the market breadth improving dramatically in Afternoon Trade.
“Investors cherry-picked into AMC's, HFC's and the day also witnessed keen interest in Sugar stocks which recorded handsome gains," S Ranganathan, Head of Research at LKP Securities said.
On the forex market front, the rupee rose by 65 paise to end at 72.72 against the US dollar.
Photograph: Dinesh Gupta/ANI Photo