Experts, however, have advised caution ahead of the European Central Bank's policy meeting later in the day.
Indian shares traded higher and closed in the green as the market gained strength on September 10 after witnessing consolidation in the last few sessions.
The BSE Sensex climbed 646.40 points or 1.69 percent to close at 38,840.32 and the Nifty50 jumped 171.30 points or 1.52 percent to end at 11,449.30.
The broader markets also gained momentum as the Nifty Midcap index was up 1.2 percent and smallcap rose 1.6 percent.
Here are the four key factors that are driving the market higher:
Reliance Industries, the country's largest listed company by market capitalisation, was the main driver of the rally. The stock shot up more than 7 percent to hit a record high of Rs 2,343.90 and RIL became the first company in India to hit a market capitalisation of $200 billion (Rs 14,85,893 crore).
The stock closed at Rs 2,314.65 on the BSE, up 7.1 percent.
After raising more than Rs 1.5 lakh crore via stake sale in Jio Platforms, billionaire Mukesh Ambani-owned company is now focussed on its retail business.
Private equity giant Silver Lake Partners will invest Rs 7,500 crore in the retail unit of India’s Reliance Industries Ltd (RIL) Reliance Retail Ventures, at an equity value of Rs 4.21 lakh crore.
Last month, Reliance Retail decided to acquire the retail and wholesale business as well as the logistics and warehousing business from the Future Group for Rs 24,713 crore.
Earlier this month, RIL said the Rs 25,215-crore investment by Brookfield Infrastructure and its institutional partners in RIL's Tower Infrastructure Trust had been completed.
Reliance Industries partly paid-up shares were locked in 10 percent upper circuit at Rs 1,394.55 per share on the BSE.
India-China border talks
The consolidation and correction in the last few sessions seem to have priced-in all India-China border standoff.
All eyes are on a meeting that India’s External Affairs Minister S Jaishankar will have with his Chinese counterpart Wang Yi later in the day as the troops of both the countries remain in a tense standoff in eastern Ladakh along the Line of Actual Control (LAC).
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The talks are expected to focus on dialling down the tensions, two days after the neighbours accused each other of firing in the air, the first time in 45 years that bullets have been fired along the LAC.
Banking & Financials
Banking & financials stocks were also on buyers' radar, with Nifty Bank and financial services indices rising 0.9 percent and 0.7 percent. respectively, amid hopes that lending activities after the end of six-month moratorium will turn strong in the coming weeks, which could support economic recovery.
Axis Bank, IndusInd Bank, SBI, PNB and ICICI Bank were leading with 1-3.5 percent gains.
"Banks were worried about moratorium-led NPAs, as the moratorium period is over, now they will have a clear idea on what is going wrong in their books. Getting clarity on likely losses was the biggest worry for the bankers," Satish Kumar, Head of Equities at Equirus Securities told Moneycontrol.
Technical View
The Nifty50 gained 1.5 percent and formed a bullish candle on the daily charts.
Experts expect the bullish momentum to continue in the coming days if the index sustains above 11,400 levels.
"We have kept above the 11,450 levels today. We need to see if we can get past this tomorrow as this is a crucial resistance level for the markets. If we are unable to go past this tomorrow, we could revisit the 11,200 levels. If we cross it, we could move higher as the bear trades would then be stopped out and the bulls would take over," Manish Hathiramani, Index Trader and Technical Analyst at Deen Dayal Investments told Moneycontrol.
Disclosure: Reliance Industries Ltd is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol.