Sensex surged over 151 points to breach the 27,000-level and Nifty hit the crucial 8,300-mark in opening trade today following widespread gains as investors widened their bets amid a firming trend in Asian markets.
However, caution prevailed ahead of macroeconomic data and quarterly earnings from blue-chip companies.
The 30-share index, which gained 173.01 points in the previous session, added 151.01 points, or 0.56 per cent, to 27,050.57 with all the sectoral indices led by metal, capital goods and bank leading the gains.
The NSE Nifty reclaimed the 8,300-mark by climbing 45.15 points, or 0.54 per cent, at 8,333.75.
Brokers said a flurry of buying by retail investors and domestic institutional investors amid a firming trend at other Asian markets with commodities-linked shares leading gains boosted by China's strong inflation reading mainly influenced the sentiment.
Among other Asian markets, Hong Kong's Hang Seng was trading higher by 0.74 per cent, while Nikkei surged by 0.36 per cent in early trade. Shanghai's Composite index, however, was marginally down.
The US Dow Jones Industrial Average ended 0.16 per cent down in yesterday's trade.
Meanwhile, the rupee was trading lower by 7 paise at 68.25 against the American currency in early trade today after the dollar gained strength overseas.
Forex dealers said increased demand for the US currency from importers and dollar's gains against other currencies overseas put pressure on the rupee.
Yesterday, the rupee had ended 3 paise higher at 68.18 against the American currency in a range bound trade amid weak dollar overseas.