The benchmark Sensex surged over 450 points in mid-session trade Thursday taking a lead from overseas, with the Dow surging to a record for the third straight session.
Also, the broader NSE Nifty again went past the key 8,200-mark in the process.
The 30-share index was trading higher by 452.34 points or 1.72 percent at 26,689.21 after moving in range of 26,721.93-26,357.35.
The gauge had lost 155.89 points in the previous session yesterday following the RBI decision to leave interest rates unchanged that caught the market by surprise.
Also, the NSE Nifty regained the key 8,200-mark by rising 135.55 points or 1.67 percent to 8,237.60.
Overseas rally has been sparked by hopes President-elect Donald Trump and the Republican-led Congress will enact policies that fuel stronger growth and loosen regulation in the world`s biggest economy.
Hopes of stimulus extension by the European Central Bank (ECB) also supported the market sentiment.
The European Central Bank is widely expected to prolong massive monetary stimulus today to spur an economy crimped by a rise in political uncertainty as exemplified by Trump`s upset win, Brexit and the rise of the far right in Europe.
In the Asian region, the Nikkei 225 rose 1.45 percent, or 268.78 points, to end at 18,765.47, while the broader Topix index of all first-section issues gained 1.48 percent, or 22.07 points, to 1,512.69.
The US Dow Jones Industrial Average ended at a new high by rising 1.55 per cent in yesterday's trade.
With Agecny Inputs