The 50-share NSE index hit 9,122.75, an all-time intra-day high, before ending at 9,087 with a solid 152.45 points gain.
The much-anticipated turnaround on the economic front has opened up a barrage of foreign capital fund flows into India.
Foreign investors pumped in over Rs 10,000 crore in the Indian capital markets this month so far.
It also got an added fillip from bullish macro data, which showed that the country's industrial production bounced back in January, expanding by 2.7 per cent year-on-year.
Factory output measured in terms of Index of Industrial Production (IIP) had contracted by 0.1 per cent in December.
However, inflation based on wholesale prices shot up to a 39-month high of 6.55 per cent in February against 5.25 per cent in January, according to official data.
Major index gainers were ICICI Bank (6.17 per cent), L&T (4.46 per cent), HUL (4.4 per cent), Asian Paints (3.99 per cent) and Ultratech Cement (3.8 per cent).
However, Coal India, Idea, Bharti Airtel, Axis Bank and Bosch witnessed profit-booking at higher levels.
Turnover in the cash segment shot up to Rs 27,836.94 crore from Rs 17,336.35 crore last Friday.
A total of 12,111.87 lakh shares changed hands in 8,848,690 trades. The market capitalisation of NSE stood at Rs 11,689,137 crore.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)