The NSE Nifty extended gains for the third consecutive session, up 47.75 point to 10,379.35 as financial stocks rose with global sentiment turning positive amid easing trade war fears.
Sustained buying was seen in FMCG, banking, energy, and financial services sectors, while investors booked profits in media, IT and pharma stocks.
Investors will now focus on fourth-quarter earnings season, which begins on Friday with Infosys.
Overseas, European shares rose as hopes that a full blown trade war between the United States and China could be averted. Stocks in Asia ended higher as investors looked past the trade worries that fueled last Friday's declines on Wall Street.
Back home, broader markets also participated in the rally, with the Nifty Midcap Index and Nifty Smallcap Index rising by 0.39 per cent and 0.13 per cent, respectively.
The Nifty 50 index rose 47.75 points, or 0.46 per cent to end at 10,379.35, its highest closing level since March 14, 2018 before moving in a range of 10,397.70 and 10,328.50. The Nifty witnessed an intraday movement of about 69.20 points.
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Sector-wise, FMCG rose by 1.13 per cent followed by Pvt Bank 0.92 per cent, Energy 0.90 per cent, Bank 0.89 per cent, PSU Bank 0.83 per cent, Finance Service 0.60 per cent, Infra 0.28 per cent, Auto 0.25 per cent and Metal 0.15 per cent.
On the other hand, media fell by 1.09 per cent, IT 0.59 per cent, Pharma 0.39 per cent and Realty 0.03 percent.
Major index gainers were Axis Bank, BPCL, Hindpetro, Hindalco, IOC, Titan, IndusIndBank, ITC and M&M.
The losers were Zeel, Lupin, TataMotors, Infosys, Vedl, BhartiAitel, IbulHsgFin, GAIL and TCS.
The market breadth, indicating its overall health, was in favour of gainers. On the NSE, 1,092 stocks advanced, 715 declined and 72 remained unchanged. Total securities that hit their price bands were 194.
Turnover in the cash segment eased to Rs 27,875.82 crore from Rs 30,418.50 crore as on last Friday.
A total of 13,825.77 lakh shares changed hands in 1,00,59,195 trades. The market capitalisation of listed firms on NSE stood at Rs 1,45,91,750.14 crore.