The Benchmark Sensex opened the day higher in trade at 39,614 points, up 214 points in trade.
The Nifty too opened the day higher at 11,850 points, up 60 points in trade. Stocks rallied and bonds retreated in Asia on Monday as a thaw in the Sino-US trade dispute tempered risks to the global economy, leading investors to pare wagers on aggressive policy easing by the major central banks.
Leading the set of gainers were ONGC, Tata Motors, Tata Steel and L&T. The Sensex losers were Bharti Airtel and Coal India.
The dollar gained on the safe-haven yen as Treasury yields jumped and futures reined in bets for a half-point rate cut from the US Federal Reserve this month. Wall Street advanced in heavy trading on Friday, with the S&P 500 and the Dow closing the book on their best June in generations.
Meanwhile, most Asian markets were trading higher, led by gains in the Shanghai Composite, which rallied almost 2 per cent.