The benchmark BSE Sensex rose over 167 points in early trade on Thursday after rating agency Moody's raised India's rating outlook from stable to positive.
Besides, a firming trend at other Asian markets buoyed the sentiments.
The 30-share index, which had gained 750.26 points in past four sessions, rose further by 167.33 points, or 0.58%, at 28,875.08 with all sectoral indices, led by metals and IT, rising up to 0.92%.
On similar lines, the National Stock Exchange index Nifty moved up by 42.80 points, or 0.49%, at 8,757.20.
Brokers said sentiments were bolstered after rating agency Moody's upgraded India's credit rating outlook from stable to positive, accelerating buying activity.
Among other Asian markets, Kong's Hang Seng index zoomed 5.43% to a new 7-year high while Japan's Nikkei gained 0.65% in early trade.
The US Dow Jones Industrial Average ended 0.15% higher in Tuesday's trade.