Benchmark Sensex spurted by 1,330 points to close at a more than two-week high while Nifty rallied 397 points to settle above the 24,500 level following buying in IT shares and Reliance Industries and a sharp global stocks rally.
The 30-share BSE Sensex jumped 1,330.96 points or 1.68 per cent to settle at 80,436.84, marking its best single-day gains in more than two months.
During the day, it zoomed 1,412.33 points or 1.78 per cent to 80,518.21.
The NSE Nifty surged 397.40 points or 1.65 per cent to close at a two-week high of 24,541.15.
From Sensex firms, Tech Mahindra, Mahindra & Mahindra, Tata Motors, UltraTech Cement, Tata Consultancy Services, HCL Technologies, ICICI Bank and Tata Steel were the biggest gainers.
Sun Pharma emerged as the only laggard.
All the sectoral indices closed in green.
BSE Midcap spurted 1.8 per cent while Smallcap index rose by 1.7 per cent.
In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled significantly higher.
"The stability of the JPY has been instrumental in driving a global market recovery.
"Besides that, the strong US retail sales and a decline in weekly jobless claims have helped alleviate fears of a US recession.
“Further, the market sentiment has improved due to a decrease in US CPI inflation.
"On the backdrop of these, the Indian IT firms exhibited strong buying interest," said Vinod Nair, Head of Research, Geojit Financial Services.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,595.27 crore on Wednesday, while Domestic Institutional Investors (DIIs) were buyers as they bought equities worth Rs 2,236.21 crore, according to exchange data.
Global oil benchmark Brent crude declined 1.22 per cent to $80.05 a barrel.
