The benchmark indices started the week on a strong footing tracking positive trend in global markets after the market's favored candidate, Emmanuel Macron, won the first round of the French presidential election, reducing the risk of a Brexit-like shock.
Back home, investors await a slew of quarterly earnings reports, including that of Reliance Industries due later in the day.
The S&P BSE Sensex settled at 29,655, up 290 points, while the broader Nifty50 closed at 9,217, up 98 points.
In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices added 0.9% and 0.8%, respectively.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,622 shares rose and 1,281 shares fell. A total of 169 shares were unchanged.
"Nifty made an exceptional start to the week gaining over a percent today, thanks to positive local cues and supportive global markets. Participants took note of latest statement from the FM Arun Jaitley that the Indian economy will grow at 7.5% in this fiscal year in accordance with the favourable macro-economic environment. Besides, firm global markets especially the European counterparts combined with encouraging earnings announcements further fuelled the rally," said Jayant Manglik, President, Retail Distribution, Religare Securities.
"The up-move on Nifty was in line with our view but the hurdle at 9,300 is still intact. Also, we've some of important results and derivatives expiry lined up ahead. So, traders shouldn't go overboard especially in index and continue with stock specific approach," he added.
Sectors and stocks
Reliance Industries (RIL) added over 1% to Rs 1,416 ahead of its March quarter results due later today. The stock beat TCS to become the most valued company on Dalal Street in terms of market-capitalisation.
RIL, with the m-cap of Rs 460,519 crore, is now ahead of TCS, which have has a m-cap of Rs 458,932 crore at close of trade on Monday, the BSE data showed.
Cement stocks were among the biggest gainers on the NSE index, following better-than-expected quarterly results by ACC on Friday. The Nifty realty index climbed 3.9% intraday to its highest since July 2014. The index settled 2.6% higher.
ACC gained 7.5% to Rs 1,608 and was the top percentage gainer on the Nifty.
Nifty Bank was up 1.4% at 21,857, led by gains in HDFC Bank (up 2.4%), Bank of Baroda (up 2.3%) Axis Bank (up 2.2%) and Canara Bank (up 1.7%).
But IT stocks fell on continued concerns over US President Donald Trump's order last week to a review the country's visa program to encourage hiring Americans. Tata Consultancy Services, Infosys, and Wipro dropped more than 1% each in intraday deals. The stocks recovered to end marginally higher by close.
TCS, Infosys, and Wipro are top beneficiaries of the H-1B visa programme, using it to send computer engineers to service clients in the US, their largest overseas market.
Among other losers, Nifty Pharma index shed 0.3%, led by losses in Lupin (down 3%), Glenmark (down 2%) and Cipla (down 1%).
Global markets
European markets opened higher. The pan-European Stoxx 600 was up 1.6%, while the French CAC 40 bourse jumped over 4%. Germany's DAX and Britain's FTSE 100 were up 2.8% and 1.8%, respectively.
Asian markets ended mixed. Japan's Nikkei jumped 1.4% as the yen retreated, while MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3%.
China's Shanghai Composite, however, fell 1.3% after state media signaled Beijing would tolerate more market volatility as regulators clamp down on riskier financing.
E-mini futures for Wall Street's S&P 500 climbed 0.9% in early trade, while yields on 10-year US Treasury notes rose almost 8 basis points to 2.31%.
(With inputs from Reuters)