Markets joined a rally in global stock markets to close at a more than two-week high on Monday, led by technology and metal stocks, as easing oil prices tempered inflation fears.
The Nifty rose 0.85% to 15,832.05, and Sensex climbed 0.82% to 53,161.28, with both the indices gaining for a third straight session.
"While the change in mood has come as a major relief, the optimism may remain for a few more sessions before the market turns volatile amid concerns over slowing global economy due to rate hikes and continuing foreign fund outflows," said Shrikant Chouhan, head of equity research (retail) at Kotak Securities.
Worries around inflation and policy have driven the benchmark indices down around 4.5% each for the month so far, putting them on track for their worst month since the pandemic-hit March in 2020.
On Monday, Nifty IT was the best performing sub-index in Mumbai, jumping 2.3% to its highest since June 10, boosted by a 2.8% rise in heavyweight Infosys.
Nifty Metal, which has fallen sharply this month, rose 1.5%.
Welspun Corp jumped 4.5% after the steel products maker said it received orders worth 6 billion rupees.
Shares of two-and three-wheeler maker Bajaj Auto gave up some of the early gains, settling 1.3% higher, as analysts said its Rs 25 billion ($319.23 million) open market share buyback announcement disappointed investors.
Aurobindo Pharma slipped 1% after the drugmaker said it received a warning letter from the Indian market regulator for not complying with disclosure regulations regarding an US Food and Drug Administration's audit on its unit.
Food delivery firm Zomato slid 6.6%, after rising 3.1% in early trade, following a deal to buy local grocery-delivery startup Blinkit for Rs 44.47 billion ($567.94 million).
