After opening on a strong note on sustained buying amid positive global, the 30-share Sensex climbed to 25,904.98 before closing with a gain of 361.53 points, or 1.42 percent, at 25,880.77 its highest closing since August 5, 2014.

The gauge has now gained over 490 points in two sessions.

"Some of the stocks like Tata Motors, Apollo Hospitals and Oil India gained after posting healthy numbers. Power and pharma stocks were also in limelight. Easing of crude oil prices too boosted market sentiment," said Rakesh Goyal,Senior Vice President, Bonanza Portfolio

Besides, fresh positions created by participants on expectations of good June IIP numbers later in the day, also acted as a tailwind, brokers said.

The 50-share Nifty of National Stock Exchange regained the 7,700-mark after a gap of one week to touch the day's high of 7,735.75 before settling 101.10 points, or 1.33 percent higher at 7,727.05.

Shares of Tata Motors soared 5.92 percent after the auto major reported over 3-fold jump in consolidated net profit.

Sensex gainers included GAIL, HDFC Ltd, HDFC Bank, ICICI Bank, NTPC, ONGC, Reliance Industries, SBI, Coal India, L&T, Sun Pharma, Cipla, Tata Steel, Bajaj Auto and BHEL.

Sectorwise, the BSE Auto index gained the most by rising 1.79 percent, followed by PSU index 1.72 percent, Oil and Gas index 1.67 percent, Banking Index 1.41 percent and Consumer Durables index 1.40 per cent.

With the improvement in the sentiment, stocks of mid-cap and small-cap were also seen in demand.

"Going ahead, we expect geo-political issues on the global front and further reform initiatives from the government on the domestic front, to drive markets. Remaining quarterly results and the progress of monsoons can be the near-term triggers," said Dipen Shah, Head- Private Client Group Research, Kotak Securities.

Meanwhile, Foreign portfolio investors (FPIs) sold shares worth a net Rs 162.92 crore on Monday.

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