The Sensex on Monday opened with a positive gap of 29 points at 4,993.
Brokers said with P Chidambaram becoming the finance minister, the government has given positive signals to carry forward the reforms process.
The mid-noon session saw the index touching an intra-day high of 5,133.
The Sensex finally ended the day with a huge gain of 162 points at 5,123. The Nifty ended 49 points higher at 1,609.
Reliance closed with a gain of 3.2% (Rs 14) at Rs 454. While ITC was up 2% (Rs 19) at Rs 918, HLL closed marginally higher at Rs 138.
Infosys flared up 8.5% (Rs 415) to close at Rs 5,319. Satyam gained 8.3% (Rs 25) to Rs 328 while Wipro ended with a gain of nearly 7% (Rs 100) at Rs 1,609.
SBI gained nearly 5% (Rs 24.50) to Rs 540. BHEL was up nearly 3% (Rs 12) at Rs 465 while HPCL was up marginally at Rs 334. MTNL ended 1% lower at Rs 125. ONGC gained marginally to end at Rs 708.