Indian stocks rose on Monday along with their Asian counterparts while aggressive buying by domestic funds also lent support to the market.
The BSE Sensex resumed lower at 25,425.32 and moved in a range of 25,757.84 and 25,413.54 before ending at 25,735.90, up 216.68 points or 0.85 per cent.
Similarly, the 50-share Nifty too went up 72.5 points or 0.93 per cent to 7,834.45.
Barring consumer durables and healthcare, all other BSE sectoral indices ended in the green. Among them, metal index gained the most by 1.47 per cent, followed by banking 1.43 per cent, realty 1.38 per cent and PSU 1.34 per cent. On ther other hand, consumer durables index was down 0.64 per cent and healthcare 0.52 per cent.
Gains were led by blue-chip stocks such as ICICI Bank , which rose 3.24 per cent.
Shares of Utility vehicle maker Mahindra and Mahindra (M&M) recovered after a torrid last week over a court ruling temporarily banning diesel vehicle registrations in the capital. M&M shares gained 2.64 per cent.
Miner Vedanta rose 2.61 per cent on upbeat Chinese markets.
Meanwhile, the biggest drag on the NSE index was Sun Pharmaceutical Industries, India's largest drugmaker, which skid more than 7 per cent after US regulators warned of standards violations at a key plant.
Local shares benefited from renewed investor risk appetite with markets seemed more sure-footed as months of uncertainty over the timing of a hike in US interest rates got over last week after the Federal Reserve raised rates for the first time in nearly a decade.
A holiday-shortened week and hopes that Parliament would pass the crucial Bankruptcy Bill also boosted the sentiment.
"Most of the global players are on vacation now and domestic investors are supporting the market with buying action in mid-caps, so the markets seem more favourable," said Deven Choksey, managing director, K R Choksey Securities.
Foreign institutional investors, who have been net buyers so far this year, have offloaded Rs 4,932 crore ($743.78 million) worth of equities this month.
A report by SMC Global said "Asian markets got off to a lackluster start today following a dive on Wall Street though losses were limited by a general lack of investor interest in a holiday heavy week."