In a show of strength, the Sensex today leapt more than 348 points -- its biggest one-day rise in three months -- to close at 32,182, taking in its stride increased prospects of an imminent US interest rate hike.
In percentage terms, the gains were above 1 per cent.
The minutes from the US Federal Reserve's September policy meeting pointed to a rate increase one additional time this year despite subdued inflation, signalling "patience in removing policy accommodation".
IIP and inflation data slated for the day heightened investors' interest as they went on a buying binge at a time of a rising trend overseas.
The NSE barometer Nifty too traded above the key 10,000- mark before closing above that level.
Oil and gas, healthcare, FMCG and auto counters drove the rally.
The 30-share Sensex after opening higher settled up 348.23 points, or 1.09 per cent, at 32,182.22. This is its best single-day performance since July 10 when it soared 355.01 points.
Yesterday, the index had dropped 90 points for the first time in four sessions as investors took profit.
Investor optimism took the 50-share NSE Nifty above the key 10,000-mark to 10,096.40 at the close, up 111.60 points -- or 1.12 per cent -- its biggest one-day gain since May 25 when it rallied 149.20 points.
Intra-day, it scaled a high and a low of 10,104.45 and 9,977.10, respectively.
With this rally, investors became richer by Rs 1.46 lakh crore as market capitalisation of BSE listed firms stood at Rs 137.56 (rpt) 137.56 lakh crore.
"Market regained from yesterday's loss and stayed close to 10,100 mark ahead of economic data -- inflation and IIP later today. Good demand on consumer stocks on arrival of festival season and ecstasy on pharma stocks amid positive regulatory approvals fuelled the market. Investor's expectation on some tailwinds in IT stocks ahead of results kept the counter busy," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.
Sensex heavyweight Reliance Industries stole the show, surging 3.82 per cent to end at Rs 872.50 ahead of the second quarter earnings slated for Friday.
TCS gained 1.92 per cent to Rs 2,548.55 as investors built up bets ahead of its earnings numbers.
A firm trend was seen in Asia while Europe also opened higher, boosted by another record show on Wall Street.
Foreign portfolio investors (FPIs) kept on offloading shares worth net Rs 107.95 crore yesterday, showed provisional data from exchanges. Domestic institutional investors (DIIs) remained net buyers, picking up shares net Rs 233.08 crore.
The bounce in the Sensex was also supported by Sun Pharma that gained 2.59 per cent to Rs 539.40 after the company said it has received establishment inspection report (EIR) from the US health regulator for its Dadra facility.
Axis Bank, Hindustan Unilever, Adani Ports and Hero MotoCorp all went up.
Private lender IndusInd Bank ended 1.47 per cent higher at Rs 1,742.60 after the company today posted 215 per cent increase in net profit for the September quarter.
The BSE energy index was the biggest mover, rising 1.95 per cent followed by telecom, realty and FMCG.
The BSE small-cap added 1.15 per cent while mid-cap ended 0.98 per cent higher.
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