Tracking the global cues and recovery of rouble, a benchmark of Indian equities markets made healthy gains in Monday's trade - up 329.95 points.
The markets opened on a positive note and later traded sideways, but recovered in the second half ahead of December futures and options expiry.
The sentiments were bouyed by a positive outlook from the recently concluded US Fed meet, as both Asian and European markets have entered the week on a positive note.
On domestic front, the final report of the Suresh Prabhu-led advisory group on developing the power and coal sector has added to reform expectations.
All sector-based indices of the S&P Bombay Stock Exchange (BSE) closed in the green. Healthy buying was observed in bank, automobile, metal, healthcare and consumer durables stocks.
The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 27,479.87 points, closed trade at 27,701.79 points, up 329.95 points or 1.21 percent from its previous day's close at 27,371.84 points.
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The Sensex touched a high of 27,725.27 points and a low of 27,382.32 points in the intra-trade.
"Markets continued the run witnessed over the past two days, on supportive global cues. Russian markets stabilized and the rouble also rose, lending support to European markets," said Dipen Shah, head of private client group research, Kotak Securities.
"We believe that, apart from the quarterly results in January, markets will be influenced by global economic developments, crude prices as well as further reform initiatives by the government."
The S&P BSE bank index gained 309.84 points, followed by automobile index which moved up 257.91 points, metal index was higher by 136 points, healthcare index increased by 129.58 points and consumer durables index rose 126.65 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed in positive territory. It was up 98.80 points or 1.20 percent at 8,324 points.
The major Sensex gainers were: Mahindra and Mahindra, up 4.09 percent at Rs.1,272.40; Coal India, up 3.61 percent at Rs.390.15; HDFC, up 2.80 percent at Rs.1,146.30; BHEL, up 2.67 percent at Rs.265.75; and Tata Power, up 2.27 percent at Rs.83.40.
The major Sensex losers were: Hindalco Inds, down 1.17 percent at Rs.155.80, Larsen and Toubro, down 0.57 percent at RS.1,523.85; Tata Steel, down 0.33 points at Rs.403.85; Infosys, down 0.24 perecnt at RS.1,997.