Mumbai: The BSE benchmark Sensex rallied by over 300 points on Monday in opening trade on fresh spell of buying by funds and retail investors, driven by a firming trend in global markets.

Covering-up of short positions by speculators ahead of monthly expiry in the derivatives segment on Thursday also supported the upside in stock prices.

The 30-share BSE index, which had lost nearly 300 points over the past two trading sessions, bounced by 300.83 points, or 1.79 percent, to 17,086.47 points in the first five minutes of trade today, backed by metal, realty, IT and banking stocks.

Similarly, the wide-based National Stock Exchange Nifty index moved up by 91.15 points, or 1.80 percent, to 5,141.10.

Brokers attributed the rise to a firming trend in Asia, in tandem with Friday's surge on the US market, as renewed efforts to limit the eurozone debt crisis boosted investors' confidence globally amid strong earnings from blue-chip companies.

Hong Kong's Hang Seng Index was up 3.50 percent, while Japan's Nikkei Index rose by 1.61 percent in morning trade.

In the US, the Dow Jones Industrial Index closed 2.31 percent higher on Friday.