The 30-share barometer resumed higher at 18,704.98 points and shot up further to 18,851.45 before quoting at 18,848.50 at 1030 hrs -- a sharp gain of 269 points or 1.45 per cent from yesterday's close.
The NSE 50-share Nifty also rose by 84.95 points of 1.50 per cent to 5,734.45 at 1030 hrs.
FIIs bought shares worth a net Rs 399.74 crore yesterday, as per provisional data from the stock exchanges.
Shares of realty, metal, auto, power, consumer durables and refinery sectors shot up on good demand.
Major gainers were - Tata Motors (4.22 pc), Tata Power (4.02 pc), Jindal Steel (3.91 pc), Hindalco (3.60 pc), Tata Steel (2.89 pc), Maruti (2.44 pc) and TCS (2.16 pc).
Asian stocks today extended previous session's gains triggered by reports of a large liquidity injection from the People's Bank of China this week.
Besides, Spain announced a severe round of budget cuts and new reforms to convince investors of its desire to reduce deficit, bolstering overall sentiment.
Key benchmark indices in Hong Kong, China, Indonesia, Singapore, South Korea and Taiwan gained up to 1.01 per cent. Japan's Nikkei was down 0.32 per cent.
