The Sensex surged 610.80 points to end at 33,917.94.
Most global markets have turned positive following United States data indicating abating inflationary pressure, which lowered the chances of an interest rate hike in the near future.
The BSE benchmark Sensex today posted its biggest intra-day gain in almost two years by surging over 600 points to close at 33,917.94. While the Shanghai Composite gained 0.59 per cent, Hong Kong's Hang Seng edged higher by 1.93 per cent and Japan's Nikkei was up 1.65 per cent. Vinod Nair, head of research, Geojit Financial Services Ltd, said, "Inflation is expected to come down to 4.74% in February which will ease bond yield in the near term".
Last week, the Indian equity markets were engulfed by bears as global trade war fears following US President Donald Trump's proposal to impose tariff on import of metals, along with the turmoil in the domestic banking sector, continued to erode the risk-taking appetite of investors.
The US data showed nonfarm payrolls jumped by 313,000 jobs last month, but annual growth in average hourly earnings slowed to 2.6% after a spike in January.
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Firm trend in other Asian markets and higher opening in European bourses, following a good show by Wall Street on Friday, lifted investors' mood in domestic markets.
Benchmark indices were in trading in the green, tracking robust global cues. "Participants will react to macro-economic data - IIP and CPI inflation - in early trade on Tuesday".
The wider Nifty50 of the National Stock Exchange (NSE) closed trade at 10,226.85 points - down 231.5 points or 2.21 per cent from its previous week's close.
Trading was brisk across global markets.