The 30-share barometer gained 149.34 points, or 0.59 per cent, to 25,377.99 with stocks of realty, banking, infrastructure sectors leading the rise, brokers said.
In the previous session, the index had gone up by 221.67 points.
The National Stock Exchange index Nifty traded higher by 44.70 points, or 0.59 per cent, at 7,571.35.
Brokers said sentiments buoyed after the RBI yesterday exempted long-term bonds from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of infrastructure and affordable housing projects.
Stocks of DLF Ltd, Unitech, IDFC, SBI, Axis Bank and ICICI Bank, Mahindra and Mahindra, Reliance Industries, Infosys and Larsen and Toubro were major gainers.
Among other Asian markets, Japan’s Nikkei rose by 0.02 per cent, while Hong Kong’s Hang Seng up 0.05 per cent in early trade today.
The US Dow Jones Industrial Average ended 0.03 per cent higher in yesterday’s trade.