The BSE Sensex was trading 342.50 points or 0.90 per cent higher at 38,524.58; while the NSE Nifty was up 101.75 points or 0.90 per cent at 11,371.90.
Axis Bank was the top gainer in the Sensex pack, rising nearly 3 per cent, followed by Tata Steel, ICICI Bank, HDFC, PowerGrid, Tech Mahindra and SBI.
On the other hand, Titan, Sun Pharma, Bharti Airtel and Reliance Industries were among the laggards.
In the previous session, the Sensex had settled 141.51 points or 0.37 per cent higher at 38,182.08. The NSE Nifty climbed 56.10 points or 0.50 per cent to close at 11,270.15.
Exchange data showed that foreign institutional investors bought equities worth Rs 302.88 crore on a net basis on Monday.
According to traders, market sentiment strengthened tracking gains in other Asian indices ahead of virtual trade talks between the US and China at the end of the week.
Consistent foreign fund inflow too buoyed investor sentiment here, they said.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with firm gains in mid-session deals.
Stock exchanges on Wall Street ended on a mixed note in overnight trade.
Global oil benchmark Brent crude was trading 0.53 per cent higher at USD 45.23 per barrel.
