Sharp fall in global oil prices yesterday also boosted investor sentiment.
Overseas, European shares were trading higher as tech stocks rebounded. Most Asian shares declined as US policy uncertainty kept sentiment in check.
The NSE Nifty opened higher at 10,063.45 and moved in a range of 10,182.65 and 10,061.90, before ending at 10,166.70, up by 122.60 points, or 1.22 percent -- its highest closing since November 30, 2017.
It saw an intra-day movement of 120.75 points.
The Nifty mid-cap and small-cap indices climbed by 1.43 per cent and 1.44 per cent, respectively.
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Major index gainers were GAIL, Bharti Airtel, Tech Mahindra, UPL, Asian Paints, Maruti, Bharti InfraTel, Tata Steel and Bajaj Auto.
Losers included Coal India, TCS, Wipro, Cipla, Sun Pharma, Dr Reddy's and IndusInd Bank.
The market breadth, indicating its overall health, was in favour of gainers. On the NSE, 1,273 shares advanced, 473 declined, while 60 remained unchanged.
Turnover in the cash segment rose to Rs 27,198.49 crore from Rs 25,481.20 crore as on Wednesday.
A total of 12,805.11 lakh shares changed hands in 99,19,432 trades. The market capitalisation of listed firms on the NSE stood at Rs 1,43,06,806.25 crore.
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