The BSE index is 0.78 percent higher after rising to its highest intraday level since April 2011, while the NSE index is up 0.82 percent, breaching the key psychological level of 6,000 for the first time in two years.
The U.S. House of Representatives approved a deal on the so-called fiscal cliff, sparking broad-based buying.
Financial shares lead the gainers as hopes of a January rate cut gather steam.
Housing Development and Finance Corp is up 1.6 percent, while ICICI Bank gains 1.1 percent.
Consumer stocks such as ITC fall as traders track a global 'risk-on' mood. ITC is down 0.2 percent, while Hindustan Unilever is flat.