The BSE S&P Sensex closed 484 points or 1.54 per cent higher at 31,863 while the Nifty 50 edged higher by 127 points or 1.38 per cent at 9,314.
Except for Nifty FMCG and PSU bank, all sectoral indices at the National Stock Exchange were in the green. Nifty IT was up by 4.4 per cent and private bank by 3.2 per cent.
Among stocks, Kotak Mahindra Bank climbed by 8.3 per cent to Rs 1,247.90 per share, a day after the company said its board had approved raising of capital by way of issue of equity shares.
ICICI Bank and HDFC Bank were up by 4.4 per cent and 2.5 per cent respectively while IT majors Tata Consultancy Services, Infosys and HCL Technologies gained by 5.5 per cent, 5.1 per cent and 3.8 per cent.
Zee Entertainment closed 3.7 per cent higher at Rs 157.55 per share after Florida Retirement System (FRS) reportedly bought over half a per cent stake in the company a day earlier. FRS acquired 51.09 lakh equity shares at Rs 141.29 per share.
However, Titan, Hindustan Lever, Power Grid Corporation and NTPC traded with a negative bias.
Meanwhile, Asian stock markets rose with a rebound in crude prices from historic lows and the promise of more US government aid to absorb the economic impact of coronavirus pandemic.
Japan's Nikkei climbed by 1.52 per cent, Hong Kong's Hang Seng by 0.35 per cent and South Korea's Kospi by 0.98 per cent.
( With inputs from ANI )