Extending its gains for the third consecutive session, market benchmark Sensex rallied 353 points on Wednesday as reports of a breakthrough in coronavirus treatment enthused global investors.
Domestic participants also cheered improving business sentiment after a survey said India's services sector activity surged to a seven-year high in January.
The 30-share BSE Sensex settled 353.28 points, or 0.87 per cent, higher at 41,142.66. It hit an intra-day high of 41,154.66.
Similarly, the broader NSE Nifty rose 109.50 points, or 0.91 per cent, to 12,089.15.
Tata Steel was the top gainer in the Sensex pack, rallying 5.14 per cent, followed by Bharti Airtel, HDFC, TCS, L&T, SBI and Reliance Industries.
On the other hand, Hero MotoCorp was the top laggard, shedding 3.83 per cent. PowerGrid, Maruti, Asian Paints and Nestle India too ended with losses.
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According to experts, reports of a significant breakthrough in coronavirus treatment research has boosted global stocks.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul settled up to 1.25 per cent higher.
Stock exchanges in Europe too opened on a strong note.
Back home, the release of stellar business data points for January too buoyed market mood, they said.
India's services sector activity surged to a seven-year high in January driven by sharp increase in new business orders, leading to job creation and business optimism amid favourable market conditions, a monthly IHS Markit survey said.
Earlier this week, another survey said the country's manufacturing sector activity climbed to a near eight-year high in January.
Meanwhile, Brent crude oil futures advanced 2.76 per cent to USD 55.45 per barrel.
On the currency front, the Indian rupee appreciated by 2 paise to 71.23 per US dollar (intra-day).