The Sensex rallied to a high of 14,377, up 270 points.
The index is now up 255 points at 14,362.
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Updated at 1344 Hrs:
The Sensex has extended gains and touched a high of 14,330, up 220 points. The index is now up 171 points at 14,280.
Mahindra & Mahindra has surged 5% to Rs 656. Larsen & toubro has gained 4% at Rs 1,367.
Bharti Airtel, Sterlite and Ranbaxy have advanced 2.5% each to Rs 791, Rs 607 and Rs 268, respectively.
ACC, TCS, Tata Steel, NTPC, Sun Pharma, Reliance and Maruti Suzuki have added 1-2% each.
However, Tata Motors has shed 3% to Rs 330. Reliance Infrastructure has slipped a per cent to Rs 1,277.
The market breadth is fairly positive. Out of 2,714 stocks traded, 1,712 have advanced while 948 have declined.