Equity benchmarks ended higher on Tuesday mainly due to buying in index heavyweights Infosys and Reliance Industries amid foreign fund inflows.
Also, firm trend in Asian gauges and record GST collection in April added to the optimism.
Rallying for the eighth straight day, the 30-share BSE Sensex climbed 242.27 points or 0.40 per cent to settle at 61,354.71. During the day, it jumped 373.8 points or 0.61 per cent to 61,486.24.
The broader NSE Nifty went up 82.65 points or 0.46 per cent to finish at 18,147.65.
From the Sensex firms, Tech Mahindra, NTPC, Tata Steel, Maruti, Infosys, Power Grid, Larsen & Toubro, Axis Bank, Titan, Reliance Industries, Wipro and Mahindra & Mahindra were the biggest gainers.
Sun Pharma, UltraTech Cement, Tata Motors, Kotak Mahindra Bank, Bajaj Finance, State Bank of India and Nestle were among the laggards.
In Asian markets, Seoul, Japan, Shanghai and Hong Kong ended in the green.
Equity markets in Europe were trading mostly lower. The US markets had ended marginally lower on Monday.
GST collection in April rose by 12 per cent annually to over Rs 1.87 lakh crore, touching an all-time monthly high, showed finance ministry data released on Monday.
Manufacturing activities in India accelerated further and touched a four-month high in April, boosted by robust new business growth, mild price pressures, better international sales, and improving supply-chain conditions, a monthly survey said on Monday.
Foreign Institutional Investors (FIIs) were buyers on Friday as they bought equities worth Rs 3,304.32 crore, according to exchange data.
Markets are now awaiting the US Federal Reserve's interest rate decision on Wednesday.
Equity markets were closed on Monday on account of Maharashtra Day.
The BSE benchmark had jumped 463.06 points or 0.76 per cent to settle at 61,112.44 on Friday. The Nifty had advanced 149.95 points or 0.84 per cent to finish at 18,065.
Meanwhile, global oil benchmark Brent crude dipped 0.38 per cent to $79.03 per barrel.