The 30-share BSE benchmark jumped 724.02 points or 1.78 per cent to close at 41,340.16.
Helped by across-the-board buying, the market capitalisation of BSE-listed companies rose by Rs 2,78,054.29 crore to Rs 1,62,27,243.78 crore.
“Domestic market moved in tandem with the global market and marched to 8 months high, in expectation that the US presidential election is moving in favour of the Democratic Party,” said Vinod Nair, head of research at Geojit Financial Services.
All sensex components closed in the green, with SBI emerging as the biggest gainer, rising 5.63 per cent after its Q2 results.
Tata Steel, IndusInd Bank, Bajaj Finance and Bajaj Finserv were other major gainers, rising up to 5.34 per cent.
Among BSE sectoral indices, metal rose by 4.43 per cent, followed by oil and gas (3.19 per cent), basic materials (2.57 per cent) and energy (2.39 per cent).
In the broader market, the BSE mid-cap and small-cap indices gained up to 1.74 per cent.