Firm Asian cues tracking record closing in the US as worries on Italy's political uncertainty faded, bolstered sentiment.
Rising for the second straight day, the 30-share index was trading higher by 119.88 points, or 0.45 per cent, to 26,468.98, with realty, power, oil and gas, capital goods, PSU and IT stocks leading the gains. The gauge had gained 118.44 points in the previous session.
Among sectoral index, the BSE oil and gas was the top performer, rising 133 points at 11839 level.
The BSE FMCG index was the sole loser, falling 40 points to 8023 level.
The NSE Nifty also gained 45.30 points, or 0.55 per cent, to 8,174.05. Brokers said that raising of bets by investors and domestic institutional investors ahead of RBI's bi-monthly monetary policy review and a firming trend at other Asian markets added to the positive mood.
Among other Asian markets, Hong Kong's Hang Seng was up 0.75 per cent while Japan's Nikkei surged 0.52 per cent in early trade today. Shanghai Composite too rose 0.08 per cent. The US Dow Jones Industrial Average ended 0.24 per cent higher in Monday's trade.