Benchmark indices were trading higher following appointment of Urjit Patel, as the the new Governor of the Reserve Bank of India, on hopes that there would be policy continuity at the RBI after Rajan's exit.
Patel is seen as hawkish on interest rates, just like outgoing RBI Governor, Raghuram Rajan. Banking stocks were flat, on worries that Patel might not be in a hurry to cut interest rates anytime soon.
Markets are eagerly awaiting the speech of Fed Chairperson Janey Yellen, later this week to see if she gives any indication on further interest rate hikes in the US.
Among the early losers in trade from the Nifty stocks were Hero Motor Corp and Hindalco.
Shares in SBI subsidiaries which rallied on Friday like State Bank of Travancore and State Bank of Bikaner and Jaipur after the share swap ratio with SBI was announced gave-up some gains.
Meanwhile, the rupee opened at 67.19 to the US dollar.