The BSE Sensex surged over 300 points in early trade and the Nifty reclaimed the 10,300-level on fresh capital inflows by foreign funds ahead of key IIP and inflation data to be released after market hours on Monday.
Asian markets too were trading in the green on strong cues from Wall Street after a better-than-expected US jobs report on Friday.
The 30-share Sensex rallied 301.55 points, or 0.90per cent, to 33,608.69 in opening trade. The index had lost 44.43 points in the previous session on Friday.
All the sectoral indices, led by IT, Teck, oil & gas, FMCG and realty sectors, were trading in the green with gains up to 1.24 per cent.
The broader NSE Nifty rose 96.10 points, or 0.93 per cent, to 10,322.95.
Meanwhile, SBI dropped nearly 1 per cent to Rs 250.80.
Brokers said fresh buying by investors and foreign funds amid a firm trend in other Asian bourses improved market sentiment.
The rupee too appreciated against the US dollar in opening trade.
On a net basis, foreign portfolio investors (FPIs) bought shares worth Rs 550.36 crore while domestic institutional investors (DIIs) sold shares worth Rs 65.00 crore on Friday, provisional data showed.
In the Asian region, Hong Kong's Hang Seng was up 1.68 per cent and Shanghai Composite Index rose 0.75 per cent, while Japan Nikkei edged higher by 1.72 per cent in early trade.
Meanwhile, the US Dow Jones Industrial Average ended 1.77 per cent higher on Friday.