The 30-share BSE sensex soared 834.02 points or 1.72 per cent to close at 49,398.29.
Following the upbeat sentiment, the market capitalisation of BSE-listed companies jumped Rs 3,41,846.01 crore to Rs 1,96,19,149.34 crore.
“Bulls took control after two days of the massive selloff, tracking positive cues from Asian markets and in expectation of a bigger US stimulus to keep the liquidity alive,” Vinod Nair, head of research at Geojit Financial Services.
Bajaj Finserv was the top gainer in the sensex pack, gaining 6.80 per cent, followed by Bajaj Finance, HDFC, ICICI Bank and L&T.
HDFC and Reliance Industries were the most significant contributors to the benchmark index gain.
All BSE sectoral indices closed with gains, with realty, metal, power, capital goods, industrials and finance indices gaining up to 4.04 per cent.
In the broader market, the BSE midcap and small-cap indices jumped up to 2.31 per cent.
On the BSE, 2,102 companies advanced, while 901 declined and 143 remained unchanged.