Driven by auto and financial stocks, Sensex went up by 256 points to end the day on 62,803. Nifty also settled above 18,598 points up 0.35 per cent.
The domestic indices managed to stay in the green for the second straight day, thanks to positive global cues, as hopes for the US federal reserve pausing its rate hikes are high.
European markets made small gains and US stock futures also remained firm due to the positivity about a respite from rate hikes.
At the same time, rising crude prices driven by a production cut in Saudi Arabia and the US dollar gaining strength, restricted the surge for global markets.
The US senate's decision to pass the debt ceiling bill that averted an economic crisis, was also a factor behind the upbeat market sentiment.
More than 240 stocks scaled their a 52-week high, with Tata Motors, Titan and Mahindra leading the pack.
State-owned oil firms BPCL and HPCL registered a 1 per cent drop because of the change in oil prices.