With Wall Street's overnight rally, investors hoped that coronavirus pandemic in the United States was nearing its peak.
The BSE S&P Sensex closed 1,266 points or 4.23 per cent higher at 31,160 while the Nifty 50 ticked up by 363 points or 4.15 per cent at 9,112.
All sectoral indices at the National Stock Exchange were in the green with Nifty auto up by 10.5 per cent, financial service by 5.8 per cent, private bank by 5 per cent and metal by 4.9 per cent.
Among stocks, Mahindra & Mahindra witnessed a dramatic jump of 17.5 per cent to Rs 383.50 per share while the country's largest passenger car maker Maruti Suzuki gained by 13.8 per cent, Tata Motors by 10.2 per cent, Bajaj Auto by 8.6 per cent and Hero MotoCorp by 8.1 per cent.
Pharma major Cipla was up by 13.1 per cent after it got final approval for a key abbreviated new drug application from the US Food and Drug Administration.
The other prominent winners were Titan, Vedanta and HDFC. However, Hindustan Lever, Nestle India, Dr Reddy's, Tech Mahindra and IndusInd Bank traded with a negative bias.
Meanwhile, Asian shares rose on hopes the COVID-19 pandemic is nearing a peak and that governments will roll out more stimulus measures.
Shares in Hong Kong were up by 1.38 per cent, South Korea by 1.61 per cent and Shanghai by 0.37 per cent. But Japan's Nikkei slipped by 0.04 per cent.
US stock markets jumped on Wednesday after President Donald Trump said Americans might be getting to the top of the curve in relation to the outbreak.
The Dow Jones Industrial Average and the S&P 500 gained by 3.4 per cent each and the Nasdaq Composite rose by 2.58 per cent.
( With inputs from ANI )