Reclaiming the 28,000-mark after 2-1/2 months on Wednesday, the benchmark BSE Sensex surged by 240 points on across-the-board buying after the government promised capital support to PSU banks, while improved macroeconomic data also boosted market sentiment.
Moreover, a firming trend in global markets, after Greek PM Alexis Tsipras was reportedly prepared to accept creditors' demands for a bailout buoyed sentiments, equity brokers said.
"It seems that the confidence in Indian markets has improved and its outperformance continues to be strong. Today with the news that Greece will accept the bailout, India rallied ahead...," said Vinod Nair, head of Fundamental Research, Geojit BNP Paribas Financial.
Shares of capital goods, banking, power, realty, auto, IT and teck sectors firmed up on good buying enquiries.
The 30-share index, which had gained 135 points in the previous session, recaptured the 28,000-mark by jumping 240.04 points or 0.86 % to close at 28,020.87.
Intra-day, it hit the session's high of 28,099.25 and a low of 27,799.91.
Sensex had last ended at 28,442.10 on April 17. The 50-share NSE Nifty also regained the 8,400-mark by climbing 84.55 points or 1.01 % to 8,453.05. The index had ended at nearly 2-1/2 months high at 8,453.05, disclosing a gain of 84.35 points or 1.01 %. Sentiment got a lift after output of eight infrastructure sectors expanded 4.4 % in May, the highest growth rate in the past six months, they said.
Global cues were also positive on signs that Greece was ready to accept creditors' proposals to end a standoff over a bailout, influenced sentiment.
Banking stocks gained after government said it is examining the funds requirement of public sector banks over three years and promised required capital support as part of a comprehensive package to strengthen them.
State-run SBI surged 1.83 %, while private lenders such as ICICI Bank gained 1.35 %, Axis Bank jumped 3.60 % on BSE.