In addition, a firming trend in other Asian markets following overnight gains on the US markets, also bolstered the trading sentiments here.
The 30-share index rose further by 165.24 points, or 1 per cent, to 16,619.54 in early trade. On Wednesday,, it had recorded a hefty rise of 433.66 points, the highest single-day gain this year.
All the sectoral indices, led by metals and banking, were trading in the positive with gains of up to 1.38 per cent.
Similarly, the wide-based National Stock Exchange Nifty index regained the 5,000 mark to trade 45.20 points, or 0.90 per cent higher, at 5,042.30.
Brokers said sentiments turned bullish following Prime Minister Manmohan Singh's bid to fast track the big-ticket infrastructure projects and expectations of a rate cut by RBI, which triggered widespread buying.
Besides, a firming trend on other Asian bourses following overnight gains on the US market after the European Central Bank said it would keep open its unlimited liquidity loans for euro-zone banks at least through 2012, further supported the sentiments here, they said.
In Asia, Hong Kong's Hang Seng Index rose by 1.53 per cent and Japan's Nikkei Index by 1.26 per cent in early trade today. The US Dow Jones Industrial Average ended 2.37 per cent higher yesterday.