The BSE Sensex surged 637.03 points, or 0.84 percent, to 76,696.38, while the NSE Nifty 50 climbed 184.35 points, or 0.78 percent, to 23,964.50 in early trade.
Buying was seen across most sectors, with gains led by banking, financial services, information technology, and auto stocks.
Positive cues from Asian markets, coupled with a decline in international crude oil prices, supported the rally as lower oil prices are expected to ease inflationary pressures and reduce India's import bill.
Market participants are also keeping an eye on upcoming corporate earnings, foreign institutional investor (FII) activity, and global macroeconomic developments, which are expected to influence trading sentiment through the week.