Benchmark indices rebounded on Monday, with the BSE Sensex climbing 329 points, tracking a rally in global equity markets, on hopes of a potential US Federal Reserve rate cut.
Buying in IT stocks were also instrumental in driving the markets higher.
The 30-share BSE Sensex climbed 329.06 points or 0.40 per cent to settle at 81,635.91.
During the day, it jumped 492.21 points or 0.60 per cent to 81,799.06.
The 50-share NSE Nifty went up by 97.65 points or 0.39 per cent to 24,967.75.
From the Sensex firms, Infosys, Tata Consultancy Services, HCL Tech, Tech Mahindra, Tata Motors, Sun Pharma, Maruti and Titan were among the major gainers.
Bharat Electronics, Asian Paints, Bharti Airtel and ICICI Bank were among the laggards.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index, and Hong Kong's Hang Seng settled in positive territory.
"A wave of optimism swept through the domestic market, driven by expectations of a Fed rate cut in September and a subsequent decline in the US 10-year yield.
"The IT index outperformed, buoyed by favourable global sentiment.
"The domestic levers stay positive with the proposed GST rationalisation to push consumption demand, and a good monsoon season could serve as a catalyst to navigate any uncertainty in the global trade environment," Vinod Nair, head of research, Geojit Investments Limited, said.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,622.52 crore on Friday, according to exchange data.
Global oil benchmark Brent crude traded 0.34 per cent up at $67.96 a barrel.