The bull run gained momentum as the benchmark Sensex recaptured the 28,000 level for a brief period amid heavy buying across the board, led by capital goods and healthcare.
Investor sentiment got a boost after data showed core infra sector growth rose to a 6-month high and Asian markets turned firmer, shrugging off a Greece default, a broker said.
The broader midcap and smallcap indices also rallied, tracking the positive cues.
The 30-share Sensex got off to a solid start at 27,823.65 and surged to 28,007.42 before quoting 27,960.87 at 1213 hours, up 180.04 points, or 0.65 per cent.
Similarly, the 50-share Nifty rose 61.25 points, or 0.73 per cent, to 8,429.75 at 1213 hours.
The major gainers include GAIl (up 1.90 per cent), l&T (1.63 per cent), Cipla (1.58 per cent), Bharti Airtel (1.50 per cent) and Coal India (1.40 per cent).
Meanwhile, foreign investors offloaded shares worth Rs 551.38 crore yesterday, according to provisional data.
In overseas markets, Asian stocks ruled higher as investors appear to have factored in Greece's loan default to IMF.
Key equity benchmark indices Japan, Indonesia, South Korea, Singapore and Taiwan inched higher by up to 0.95 per cent. China's Shanghai Composite slumped 0.31 per cent.
