Here are 10 things to know about today's trade:
The Sensex ended 646 points or 1.72 per cent higher at 38,178 and the Nifty surged 1.68 per cent or 187 points to close at 11,313.
In the last six trading sessions, the Sensex and Nifty corrected nearly 4 per cent marking their worst losing streak since July.
All sector gauges barring the Nifty IT index ended higher led by the Nifty Bank index's 3.7 per cent gain.
Nifty Bank index surged 1,018 points to 28,840.
Nifty Financial Services, Nifty Metal, Nifty PSU Bank, Nifty Realty and Nifty Private Bank indexes also rose between 2.2-3.7 per cent each.
Mid- and small-cap shares also witnessed buying interest as the Nifty Middcap 100 index rose 1.3 per cent and Nifty Smallcap 100 index climbed 0.9 per cent.
"Markets are likely to scale new highs by Diwali," AK Prabhakar, head of research at IDBI Capital told NDTV over phone.
Analysts say the onset of the corporate earnings season and macroeconomic data will be monitored closely for near-term cues.
Corporate earnings season for Nifty companies will begin from Thursday with IndusInd Bank and IT giant Tata Consultancy Services reporting their second quarter numbers. Infosys will declare its results on Friday.
IndusInd Bank was top gainer in the Nifty 50 basket of shares. The stock rose 5.5 per cent to close at Rs 1,309. Bharti Infratel, Bharti Airtel, State Bank of India, UltraTech Cement, ICICI Bank, Mahindra & Mahindra, Tata Steel and Grasim Industries were also among the gainers. On the flipside, Yes Bank, Hero MotoCorp, Zee Entertainment, Titan and HCL technologies were among the losers.