The Sensex and the Nifty rose on Monday, in line with broader Asian markets following a U.S.-China trade truce, with financial stocks seeing a surge, while oil shares retreated on rising crude prices.
The Nifty was 0.47% higher at 11,843.45 as of 1015 IST, while the Sensex was up 0.53% at 39,601.27.
Sentiment was also supported by a truce between U.S. and China eased trade tension worries, sending MSCI's broadest index of Asia-Pacific shares outside Japan 0.4% higher.
United States and China on Saturday agreed to restart trade talks after President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met at the sidelines of the G20 summit in Japan over the weekend.
"Markets are reacting favourably to talks out of the G-20 summit; the developments are seen as a progress in terms of a possible resolution", said Sunil Sharma, chief investment officer, Sanctum Wealth Management.
Lender Indiabulls Housing Finance Ltd and electricity generator NTPC Ltd were among the top gainers on the NSE index, gaining as much as 2.4% and 2.16%, respectively.
NTPC was on track for its sixth consecutive session of gains.
The country's auto index was 0.76% higher ahead of monthly sales numbers. Motorcycle manufacturers TVS Motor Company was up as much as 1.82% while Eicher Motors Ltd climbed as much as 2.25%
Oil marketing companies Indian Oil Corp Ltd fell as much as 1.1% and Bharat Petroleum Corporation Ltd was down as much as 0.8%.
Oil prices rose more than $1 a barrel on Monday after Saudi Arabia, Russia, Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting this week.
A rise in crude prices does not bode well for markets in India, which is the world's third-biggest oil importer.