Overall on the BSE, 1,522 stocks — or about six out of every ten traded — closed in the green, helping investor wealth surge by Rs 1 lakh crore in the session. Oil & gas and realty led 12 out of the 13 sectoral indices higher.
The benchmark Sensex, which had lost 151 points in the previous session, surged by 371.10 points, or 1.79 per cent to end at 21,079.72.
This is the best gain since the index rose by 387.69 points on November 25.
For the week, the Sensex rose by 364.14 points, the best gain in three. Reliance Industries led the rally in refinery sector by surging 4.58 per cent after the Cabinet decided to allow the energy major to double the price of natural gas from April.
ONGC also spurted 3.93 per cent.
HDFC, ICICI Bank, TCS, M&M and HUL were among the 27 winners in 30-share Sensex.
The broad-based National Stock Exchange index Nifty shot up by 107.6 points, or 1.74 per cent, to 6,274.25.
Also, the SX40 index of MCX Stock Exchange jumped by 189.01 points to end at 12,525.54.
Brokers said the domestic stocks markets were buoyed by the RBI decision to hold rates and marginal amount of taper announced by the US Fed.
Positive foreign flows after the announcement also supported sentiments, they added. Sugar sector stocks were back in demand after the government decided to provide interest free loan to cash-starved sugar millers to pay sugarcane farmers.
Shakti Sugar shot up by 7.84 per cent, Dhampur Sugar by 1.97 per cent and Shree Renuka by 1.01 per cent were among major gainers.
Across the market, 14 stocks in Group A, including Infosys, JSW Steel, Lupin, Maruti and Wipro, hit 1-year highs. However, the rupee was last trading almost flat at 62.15 against the US dollar.