The BSE benchmark Sensex on Monday soared 460.36 points to close at 25,688.86 on the back of buying by foreign funds and retail investors.
The NSE Nifty surged 132.60 points to end at 7,866.05.
Brokers said recent string of positive corporate results raised tentative hopes about an improving domestic economy.
Sentiment was also boosted after a weaker-than-expected US jobs report on Friday left some economists anticipating only one interest rate hike from the Federal Reserve this year.
“We have recovered from the lows and have been able to sustain higher levels as we are seeing buying coming in at lower levels. Also, earnings season so far has been fairly positive,” said Gaurang Shah, vice president at Geojit BNP Paribas, adding he sees any downside in local shares as a buying opportunity.
Prominent gainers were NTPC, HDFC Ltd, HDFC Bank, Asian Paints, M&M, Adani Ports, ICICI Bank, Hero MotoCorp, ONGC, Bharti Airtel, L&T and Bajaj Auto.
The US Dow Jones Industrial Average ended 0.45 per cent higher in Friday’s trade.