The BSE benchmark Sensex Monday rose 169 points, led by gains in IT stocks amid positive global cues.
The NSE barometer Nifty gained 52 points to reclaim the 11,900 level.
Top gainers in the Sensex pack were TCS, Bharti Airtel, Infosys, Axis Bank, L&T, ITC, PowerGrid, HCL Tech and Tata Steel, ending up to 2.39 per cent.
On the other hand, Yes Bank, Tata Motors, Coal India and ONGC were among the top losers, falling up to 2.89 per cent.
Analysts said investors took positive cues from upbeat global markets amid easing global trade war concerns after the US dropped plans to impose tariffs on Mexico.
After soaring over 350 points during the day, the BSE gauge settled 168.62 points, or 0.43 per cent, higher at 39,784.52. The index hit an intra-day high of 39,979.48 and a low of 39,619.97.
Similarly, the broader NSE Nifty rose 52.05 points, or 0.44 per cent, to settle at 11,922.70. During the day, the index touched a high of 11,975.05 and a low of 11,871.75.
In Asia, Shanghai Composite Index settled 0.86 per cent higher, Hang Seng rallied 2.27 per cent, Nikkei jumped 1.20 per cent and Kospi gained 1.31 per cent.
Bourses in Europe were also trading higher in their early deals.
On the currency front, the Indian rupee depreciated 9 paise to 69.55 against the US dollar.
Brent crude futures, the global oil benchmark, fell marginally to USD 63.23 per barrel.