After initial surge, markets rolled back to minimise the day's gains on profit booking and investors squaring up their pending positions ahead of monthly settlement in the derivatives segment tomorrow.
Brokers said foreign institutional investors remained net buyers on improving economic growth and rupee rising to over seven-month high against the dollar.
A firming global trend after the US consumer confidence climbed to a six-year high further supported the uptrend. In 30-BSE index components, 16 stocks climbed.
Gains in Larsen & Toubro, Reliance Industries (RIL) and Tata Motors helped the Sensex post gains for the third straight day.
Maruti Suzuki, Bajaj Auto, Axis Bank, Bharti Airtel, ONGC and Coal India were among other major gainers.
The metal sector index gained the most by surging 2.70% to 9,541.42, followed by capital goods index by 1.35% to 11,893.28. Oil and gas index rose by 1.14% to 9,271.21 and PSU index by 1.10% to 6,137.89.