The 30-share index leaped 738.03 points, or 3.21 percent, at 23,740.03 at 1430 hours in afternoon trade. It touched a high of 23,750.91.

The gauge had lost 152.30 points in yesterday's highly volatile session, mainly hit by a proposal for a higher dividend distribution tax on those earning more and a one on raising securities transaction tax on options trading.

Growth-oriented budgetary proposals like higher spending in infrastructure, allocation of nearly Rs 36,000 crore for the farm sector and a higher credit target aimed at doubling farmers' income in five years buoyed sentiment, brokers said.

The government's commitment to keep the deficit at 3.5 percent of GDP in 2016-17, too lifted mood. The rupee strengthening by 47 paise to 67.95 against the American currency (intra-day) at the forex market did its bit.

The gains mostly came from FMCG, auto, IT, capital goods, banking, technology and realty, which rose by up to 4.87 percent. Also, the 50-share NSE Nifty recaptured the crucial 7,200-level by quoting higher by 223.70 points, or 3.19 percent, at 7,210.75.

Among the 30-share Sensex constituents, ITC, Maruti Suzuki, Hero MotoCorp, ICICI Bank, Tata Motors, Adani Ports, TCS, L&T, GAIL and Wipro jumped by up to 9.87 percent.

Hong Kong's Hang Seng index surged 1.55 per cent while Japan's Nikkei spurted 0.37 percent. Europe was also in the positive terrain in morning trade.

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