The market benchmark BSE on Wednesday surged by 323 points to regain the 28,500- level on value-buying in recent beaten-down stocks such as Sun Pharma, while a Rajya Sabha panel endorsing the GST bill also helped the rally.
Moreover, improved rains and falling global crude prices, which boosted hopes of a rate cut by the Reserve Bank next month, too accelerated buying, traders said.
Sun Pharma's shares on Wednesday today recovered on value-buying and surged 3.35% to Rs 833.05 after tumbling 15% in Tuesdays's trade.
Meanwhile, a Rajya Sabha Select Committee endorsed almost all the provisions in the landmark bill on GST, while also agreeing to demands of parties like TMC for a five-year compensation to states.
The 30-share BSE index opened lower at 28,159.42 and eased to touch day's low of 28,070.91 in early trade. However, it bounced back to trade in positive zone on widespread buying to hit a high of 28,546.42 before winding up 322.79 points or 1.15% higher at 28,504.93.
The gauge had lost 281.17 points in the last two days.
The 50-share NSE Nifty after regaining the 8,600-level, scaled session's high of 8,643.90 before settling 104.05 points or 1.22%higher at 8,633.50, its highest closing since April 16.
Among Sensex gainers, RIL topped the list by surging 4.26% on buying by participants on hopes of a strong earnings to be released on Friday.
Other gainers included M&M, Bajaj Auto, HDFC, HUL, Tata Steel, Wipro, Cipla, NTPC, HDFC Bank, GAIL, ONGC, Coal India, Maruti Suzuki and Hero MotoCorp.
Among sectoral indices, BSE oil&gas index gained the most by soaring 2.36%, followed by Banking 1.45%.
ICICI Bank rose 1.80%, SBI gained 1.67%, HDFC Bank 1.43% and Axis bank 0.81%.