The BSE Sensex closed 1.16 percent higher at 38,694.11 gaining 442 points on Monday while NSE's Nifty 50 advanced 1.17 percent to close at 11,691.95 points, aided by the gains in Asian markets and record Wall Street highs reported on Friday. Nifty 50 crossed the 11,700 mark for the first time ever at 11,700.95 just before the closing time.

Sector-wise, all were trading higher on BSE (Bombay Stock Exchange) with banking index (Bankex) leading the lot with a 1.69 percent gain. ICICI Bank, SBI, Yes Bank and Kotak Mahindra Bank closed higher. The metal stocks followed with a 1.45 percent gain.

The mid and small-cap indices were in line with their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indexes rising 1.04 percent and 0.62 percent respectively.

Indian rupee opened higher against the US dollar at 69.77 in the morning, lost stance and depreciated to cross past the 70-mark.

Meanwhile, among individual stocks, shares of Sun Pharma slumped over 1 percent after news reports of a surprise visit from the US FDA (Food and Drug Authority) at its Halol plant made headlines.

Shares of Future Retail rose as much as 7.4 percent, the most in over three months after the Economic Times reported that Google may tie up with PayTm Mall to invest Rs 3,500-4,000 crore for 7 to 10 percent stake in the Mumbai-based department store chain.

JSW Steel Ltd shares hit a new record high of Rs 364.80 after rising as much as 2.8 percent.