The BSE S&P Sensex closed 986 points or 3.22 per cent higher at 31,589 while the Nifty 50 moved up by 274 points or 3.05 per cent at 9,267.
Except for Nifty FMCG and pharma, all sectoral indices at the National Stock Exchange were in the green Nifty private bank up 7.7 per cent, financial service by 5.7 per cent each, auto by 5.4 per cent and realty by 3.8 per cent.
Among stocks, Axis Bank was star of the day with a remarkable gain of 13.9 per cent to close at Rs 481.40 per share. ICICI Bank jumped by 9.6 per cent, IndusInd Bank by 8.4 per cent and Kotak Mahindra Bank by 5.6 per cent.
Auto majors Eicher Motors and Maruti were up by 9.9 per cent and 8.7 per cent respectively.
Tata Consultancy Services rose by 5.3 per cent after the IT major reported sales wins and its promise to push ahead with hiring this year. Its consolidated revenue for the fourth quarter grew 5.1 per cent to Rs 39,946 crore.
Reliance Industries too gained by 5.3 per cent to wind up the day at Rs 1,229.90 per unit. However, Nestle India, Hindustan Lever, Sun Pharma and Tech Mahindra were in the negative zone.
Meanwhile, Asian stocks gained after US President Donald Trump's announced plans to gradually re-open the US economy.
Japan's Nikkei rose by 3.15 per cent while shares in South Korea gained by 3.09 per cent and in Hong Kong by 1.56 per cent.
( With inputs from ANI )