The BSE Sensex rose 1.75 percent on Thursday, after the government took steps to break a Parliament logjam paving the way for key economic reforms.
The 30-share benchmark index ended 328.83 points higher at 19,170.91 with 26 of its components closing in the green.
The broader 50-share National Stock Exchange (NSE) Nifty index ended 1.70 percent or 97.55 points higher at 5,825.00 on Thursday.
Both indices surged to their highest close since April 2011 after prospects of awaited reforms lifted investor sentiment.
Meanwhile in the New Delhi bullion market, gold fell by Rs 35 to Rs 32,940 per 10 grams while silver plunged by Rs 1,000 to Rs 62,000 per kg.