The barometer 30-scrip Sensitive index (Sensex) of the BSE, which opened at 33,289.96 points, closed at 33,596.80 points - up 577.73 points or 1.75 per cent from its previous session's close. That said, all eyes are now on the RBI policy decision due later in the day, with many economists expecting the central bank to keep the repo unchanged at 6.00 percent, its lowest level since November 2010, despite increased risks to inflation.
The NSE Nifty settled 196.75 points, or 1.94 points higher at 10,325.15.
"The markets also cheered the 'normal" southwest monsoon forecast by private weather forecasting agency Skymet.
All about 'Sugar tax 2018' which comes into force today
I don't know what the scale of sugar tax avoidance is likely to be, it really depends on how it is sold and the routes to market. MailOnline has today broken down what the sugar tax means to consumers - calculating roughly how much prices will go up.
Equities were also buoyed by favourable global trends after the United States indicated it was open to negotiations in its trade dispute with China, easing fears of a full-blown trade war. The Reverse Repo rate now remains unchanged at 5.75%.
Meanwhile, domestic institutional investors (DIIs) bought equities to the tune of Rs 615.28 crore yesterday, while foreign portfolio investors (FPIs) net sold shares worth Rs 108.02 crore, according to provisional data. Vedanta, HUL, Axis bank, UPL, SBI, TCS were the other major losers in the Nifty falling between 0.7-1 per cent.
Koreas Hold Preparatory Talks Ahead of Landmark Summit
South and North Korea remain technically at war, as the 1950-53 Korean War ended with an armistice and not a peace treaty. Thursday's meeting was originally scheduled to be held Wednesday, but the North requested that it be delayed by one day.
Elsewhere, Asian shares traded mixed; Japan's Nikkei fell 0.10 per cent while Hong Kong's Hang Seng gained 0.93 per cent.
Sectoral indices led by metal, IT, auto, teck, and capital were all in red and trading losses up to 1.06 percent. Earlier, the provisioning limit was 50 per cent. The German DAX dropped 0.4 percent and France's CAC 40 index slid 0.2 percent while the U.K.'s FTSE 100 inched up 0.1 percent.
Commonwealth Games: Indian cyclists disappoint in qualifiers
Chinappa had little trouble getting past Papua New Guinea's Lynette Vai, winning 11-3 11-7 11-2. Australia and New Zealand will battle it out for the gold medal in the event.