Sensex surged over 390 points and Nifty topped the 8,500-level in early trading on Thursday session, tracking a rally in global equities.
The markets recovered from the blues of the unexpected Trump win at the US elections and and the Centre's black money crackdown.
Besides, value-buying in bluechip stocks and covering-up by speculators who had created short-positions in yesterday's trade and strengthening rupee too supported the rebound.
The 30-share index, which had lost 338.61 points in yesterday's trade, recovered 390.04 points or 1.43 per cent, to trade at 27,642.57, with all sectoral indices led by metal, realty, PSU and healthcare trading in the green, rising by up to 4.77 per cent.
Similarly, the NSE Nifty surged 127 points, or 1.50 per cent, to 8,559. Brokers said apart from emergence of buying at prevailing levels by investors, rally at other Asian markets amid overnight gains on the Wall Street following Donald Trump's shock win of the US presidency, in anticipation of favourable policies fuelled the upmove.
Besides, domestic investors seemed coming to terms with the government's decision to withdraw Rs 500 and Rs 1,000 currency notes from circulation in a bid to curb black money and terror funding.
Major gainers that supported the key indices were Tata Steel, Cipla, SBI, Bharti Airtel, Adani Ports, Axis Bank, Bajaj Auto, ICICI Bank, M&M, TCS and ONGC, gaining by up to 7.58 per cent.
Sun Pharma too was quoting 3.24 per cent higher at Rs 682.50 ahead of its quarterly earnings, to be released later in the day. In the Asian region, Japan Nikkei climbed 5.82 per cent,while Hong Kong's Hang Seng gained 1.92 per cent in early trade on Thursday. Shanghai Composite was up 1.14 per cent. The US Dow Jones Industrial Average ended 1.40 per cent higher in Monday's trade.