The Nifty private bank index rose as much as 1.5 per cent.
The SP BSE Sensex on Thursday rose 284.20 points to close at 35,463.08.
The National Stock Exchange (NSE) benchmark index Nifty50 settled at 10,768.35.
Stock markets closed at their highest in more than three weeks today, with market heavyweights such as Reliance Industries Ltd and ICICI Bank Ltd contributing most to gains, a day after the Reserve Bank of India (RBI) raised its policy rate for the first time in over four years.
All sectoral indices were trading in the green, with maximum gains coming in from banks, IT as well as auto stocks.
Factors that seem to have worked in market's favour are global cues and monsoons, said experts.