The 30-share Sensex ended at 19,414 up 161 points or 0.84% and the 50-share Nifty ended at 5,863 up by 45 points or 0.77%.
The Sensex and the Nifty touched an intra-day high of 19,465 levels and 5,878 mark, respectively.
On the global front, Japan's Nikkei average rose to a 4-1/2-year high for a second day in a row on Thursday, boosted by expectations of more aggressive monetary policy, though the index failed to close above the key 12,000-mark.
The Nikkei ended 0.3 percent higher at 11,968.08 points, extending its winning streak to six straight sessions, after climbing as high as 12,069.60 earlier in the day.
European shares edged up in early trade on Thursday, leaving key indexes hovering around multi-year highs and with investors forecasting more market gains in the medium term.
The pan-European FTSEurofirst 300 index, which had reached a 4-1/2 year intraday high of 1,193.35 points on Wednesday, rose 0.1 percent to 1,187.61 points by 0807 GMT.
Back home, the rupee recovered from initial losses but was still quoting lower by three paise at 54.75 on mild dollar demand from banks and importers on the back of firm global cues.
On the sectoral front, BSE Realty, IT and Capital Goods indices surged by almost 2% followed by counters like TECk, Banks, Auto, Healthcare and FMCG, all gaining by nearly 1% each. Howevver, BSE Metal and Consumer Durable indices declined between 0.5-1%.
Shares of software exporters gained on signs of improving business sentiment in the US. Software majors earn most of their revenue from exports to the US.
Infosys and Wipro touched their 52-week highs, while HCL Technologies and TCS were quoting at their historic highs on BSE.
Among the individual stocks, Infosys ended at 1.29% at Rs 3,005, its highest level since April 2011 on BSE.
The stock gained 3.3% in past three trading sessions after the company announced that it plans to add approximately 200 new jobs in the next fiscal year at its Cumberland location in Cobb County, and expects additional expansion in the metro Atlanta area over the next couple of years.
Wipro too, was trading at its highest level since April 2011, ended up nearly 2% at Rs 449, extended its 5.3% rally
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