The NSE Nifty also recaptured the 8,600-level by rising 73.65 points or 0.86 per cent to settle the day at 8,659.90.
Sustained buying in healthcare, realty and FMCG stocks helped the 30-share BSE barometer to end the day at 28,504.46, a rise of 0.86 per cent or 244.32 points.
The Sensex had closed at 28,622.12 on March 18.
"Defensive stocks were moving ahead before the important policy meet tomorrow. As RBI is likely to hold rates, there is scope to surprise the market through CRR/SLR and assessment of future outlook," said Vinod Nair, Head-Fundamental Research at Geojit BNP Paribas Financial Services.
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On Sensex, Sun Pharma stocks zoomed 8.34 per cent to close at a lifetime high of Rs 1,168.50 after the company entered into a pact looking to settle a lawsuit against it. Whereas, Cipla and Dr Reddy's rose by 3.59 per cent and 4.33 per cent, respectively.
Absence of cues from global markets which remained closed today for the Easter holiday, forced participants to keep their commitments selective, brokers said.
In line with equities, the Indian rupee strengthened by another 30 paise to close at 62.19 against the dollar on sustained selling of the American currency by banks and exporters on hopes of good foreign capital inflows amidst weaker-than-expected US jobs data released last weekend.
Gold also rose in Singapore by 1.4 per cent to USD 1,223.51 an ounce, the highest price since February 17 and silver by 0.9 per cent to USD 17.21 an ounce.