The Sensex rallied 320.56 points or 1.16 percent to 28034.93 and the Nifty jumped 93.95 points or 1.10 percent to 8645.05.
About 1589 shares advanced against 495 declining shares on the BSE.
Top gainers from the Sensex pack are ICICI Bank, SBI, Axis Bank, Hero Moto and Bajaj Auto, all surging between 2%-3%.
Among other shares, Siemens is up nearly 2% at Rs 1274 on the Bombay Stock Exchange after the board announced a special dividend of Rs 27.50 per equity share for the year ended March 31, 2016.
Financial shares like ICICI Bank, Axis Bank, SBI and HDFC are leading the gains, all up between 1-2%.
Other notable gainers are Tata Steel, Tata Motors, Power Grid, ITC, NTPC and L&T.
Vedanta has risen 2% on the BSE after the company said import and transit permits for the company's iron ore business at Goa was re-issued on 3 August 2016.
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