The 30-share barometer, which had gained 247.72 points in the previous session, surged by 157.59 points, or 0.75 per cent, to 21,017.45.
Brokers said sentiments buoyed after the RBI unexpectedly decided to keep key policy rates unchanged amid a firming trend in the Asian region after the US Fed decided to trim stimulus from next month.
Stocks of IT, realty and metal sectors led the rally.
On similar lines, the National Stock Exchange index Nifty moved up by 46.60 points, or 0.74 per cent, to 6,263.75.
Among other Asian markets, Hong Kong’s Hang Seng index rose by 1.13 per cent, while Japan’s Nikkei gained 1.60 per cent in early trade today. The US Dow Jones Industrial Average ended 1.84 per cent higher in yesterday’s trade.