Mumbai: The BSE benchmark Sensex shot up by over 227 points in early trade on Wednesday on a sustained buying by funds and retail investors amid positive cues from global markets.

Extending gains for the fourth straight session, the 30-share index, which had gained almost 668 points in the past three days, rose by 227.07 points, or 1.27 percent, to trade above the 18,000 points level at 18,040.69.

It has touched the 18,000-level after two weeks.

Brokers said continued buying by funds and retail investors amid a firm trend in Asian markets, following overnight gains in the US markets on upbeat economic data, triggered fresh spell of buying activity on the domestic bourses.

All sectoral indices, led by metal and capital goods, were trading in the positive territory with gains up to 1.72 percent.

The wide-based National Stock Exchange index Nifty moved up by 69.90 points, or 1.28 percent, to 5,499.40.

They said, however, fears of a hike in freight rates in the Rail Budget 2012 to be presented on Wednesday, restricted the gains to some extent.

Meanwhile, in Asia, Hong Kong's Hang Seng Index rose by 1.21 percent, while Japan's Nikkei index was up by 2.03 percent.

The US Dow Jones Industrial Average gained 1.68 percent to reach highest level since December 31, 2007, in Tuesday's trade.