Benchmark indices ended the day sharply higher, led a short covering rally, which was forced by smart gains in European indices.
Asian stocks also moved higher on Monday as weakish Chinese inflation data led to optimism that Beijing would loosen its monetary policies even further.
Gainers were led by Hindalco and Bharti Airtel, with both the stocks jumping near 3 per cent in trade.
Other notable gainers were Tata Steel, Tata Motors and Vedanta. Select software stocks also saw buying interest with TCS and Wipro notching smart gains of near 2 per cent.
Shares in Shares in Sun Pharma ended higher after the company said that one of its wholly owned subsidiaries has received approval from USFDA for its New Drug Application (NDA) related to BromSite
Orchid Pharma jumped almost 10 per cent, again following a US FDA approval for one of its products.
Other pharma shares, however, saw a weakish trend with Lupin leading declines on the BSE. Cipla and Lupin were the other losers in trade.
Idea Cellular was another telecom stock along with Bharti Which surged and ended higher by 4 per cent.
Meanwhile, markets in Europe were trading with gains of near 1 per cent, with the German DAX leading the set of gainers.