The 30-share barometer, which had gained almost 34 points in the previous session on Friday, added 81.16 points, or 0.46 per cent, to 17,772.24.
The market remained closed yesterday on account of 'Eid-ul-fitr'.
All the sectoral indices, led by IT and auto, were trading with gains of up to 1.13 per cent.
Similarly, the wide-based National Stock Exchange index Nifty moved up by 20.75 points, or 0.38 per cent, to 5,387.05.
Brokers said trading sentiment buoyed after Finance Minister P Chidambaram asked banks to cut interest rates and keep EMIs at affordable levels to encourage sale of consumer durables to restart the engine of manufacturing.
Besides, a firming trend in Asian region too supported the upside in stock prices, they said.
In Asia, Hong Kong's Hang Seng rose by 0.03 per cent, while the Japan's Nikkei by 0.10 per cent in early trade today.
The US Dow Jones Industrial Average, however, ended 0.03 per cent lower in yesterday's trade.
