The benchmark equity indices, Sensex and Nifty, rallied sharply on Wednesday, settling nearly 4 percent higher.
The surge came after the US and Iran announced a two-week ceasefire, triggering an impressive rally in global markets and a decline in crude oil prices.
The RBI’s MPC decision to pause the repo rate also aided the uptick in the stock market.
At close, the Nifty was up 873.70 points, or 3.78 percent, at 23,997.35, while the Sensex ended with a strong gain of 2,946 points, or 3.95 percent, at 77,562.90.
The volatility index, India VIX, also plunged by more than 20 percent, falling below the 20 level.
In terms of sectors, 14 of the 16 major sectoral indices advanced, with only IT and pharma emerging as laggards.
Larsen & Toubro and InterGlobe Aviation were the key gainers, rising by 7 percent and 10 percent, respectively.
The Indian rupee appreciated by 50 paise to 92.56 against the US dollar in early trade following the ceasefire announcement.
The Nifty Realty index also posted significant gains, extending its rally for the fifth consecutive session. The index was supported by gains in Prestige Estates Projects, DLF, among others.
On the Nifty, key gainers included Shriram Finance, Adani Enterprises, Tata Motors Passenger Vehicles, InterGlobe Aviation, and Eicher Motors. On the losing side were Coal India, Tech Mahindra, Nestle India, Wipro, and ONGC.
On the NSE, around 100 stocks touched their 52-week highs. These included Adani Energy, Titan Company, ABB India, Natco Pharma, SAIL, Anand Rathi, Aurobindo Pharma, Godawari Power, Granules India, and CCL Products, among others.
The Nifty Bank index extended gains for the fifth straight session, rising over 5 percent to hit a high of 55,552.25.
AU Small Finance Bank was the top gainer, rising over 8 percent, while shares of Union Bank of India and IndusInd Bank followed, gaining 7.82 percent and 6.33 percent, respectively.