The 30-share index, Sensex, rose by 139.37 points to 17,065.59 points with stocks of metals, oil and gas, realty and power sectors driving the rally. The BSE barometer had recorded a rise of 294.21 in the previous session.

The wide-based National Stock Exchange index Nifty rose 34.65 points, or 0.68 per cent, to 5,067.35 points.

Marketmen said trading sentiments remained strong after the economy grew by 7.9 per cent in the second quarter and on firming trend on the global markets on easing of Dubai debt concerns.

Stocks of the country's most-valued firm Reliance Industries were in the limelight and traded 1.24 per cent higher at Rs 1,076. Other gainers were Sterlite Industries up 2.06 per cent to Rs 875.30, Tata Steel 1.09 per cent to Rs 581.65, Hindalco 2.03 per cent to Rs 140.85, Maruti Suzuki by 2.47 per cent to Rs 1,600.20, SBI 0.87 per cent to Rs 2,257.70 and ICICI Bank 0.56 per cent to Rs 869.15.

The Hong Kong's Hang Seng index was up 0.68 per cent while Japan's Nikkei rose 1.77 per cent in the morning trade today. The US Dow Jones Industrial Average ended 0.34 per cent higher in yesterday's trade.

Broader market indices were also in the green with the BSE midcap index up 0.89 percent and the BSE small cap index ruling 1.24 percent higher.