Benchmark BSE Sensex rose by about 322 points to close above the 60,000 level on Monday tracking gains in banking, IT and energy stocks amid positive global equities.
Rising for a third straight day, the 30-share barometer closed higher by 321.99 points or 0.54 per cent at a three-week high of 60,115.13.
As many as 21 of the index constituents closed in the green. After a strong opening, the index touched a day's high of 60,284.55 and a low of 59,912.29.
The broader NSE Nifty spurted by 103 points or 0.58 per cent to settle at 17,936.35 points, with 36 of its constituents ending with gains.
In the three-day rally, Sensex advanced 1,086 points, while Nifty gained nearly 312 points.
Foreign fund buying, crude oil prices trading near USD 93 level, and macro data reflecting the strong growth recovery, boosted investor sentiment. Gains in global equity markets also propped up the local equities.
"Domestic economy is witnessing strong vigour and the same is assisting a steady growth in Indian equities. A 15.5 per cent YoY increase in bank credit during August suggests that the economy is recovering rapidly," Vinod Nair, Head of Research at Geojit Financial Services said.
Investors were also awaiting key consumer inflation and industrial production data to be released after market hours.
Due to rising food prices, domestic inflation figures are predicted to show a gradual rise from 6.7 per cent in July, which could add volatility in the short-term, Nair said.
Among Sensex stocks, Titan rose the most by 2.39 per cent, followed by Axis Bank, Tech Mahindra and Tata Steel. Gains in RIL, Infosys, TCS, ICICI Bank, Bajaj Finance and L&T aided the rally.