IndusInd Bank was the top gainer in the Sensex pack, rallying over 7 per cent, followed by SBI, ICICI Bank, HDFC twins, Axis Bank, Bajaj Finserv and UltraTech Cement.
NSE Nifty soared 245.35 points to 14,923.15.
Equity gauges Sensex and Nifty registered their biggest single-session gains in about seven weeks on Monday as investor optimism returned amid a consistent drop in new COVID-19 cases in the country.
The BSE benchmark Sensex zoomed 848.18 points or 1.74 per cent to end at 49,580.73; and the NSE barometer Nifty surged 245.35 points or 1.67 per cent to settle at 14,923.15 -- the biggest one-day gains for both indices since March 30.
On the Sensex chart, IndusInd Bank was the top gainer, rallying over 7 per cent, followed by SBI, ICICI Bank, HDFC Bank, Axis Bank, HDFC and Bajaj Finserv.
On the other hand, L&T, Bharti Airtel, Nestle India, Sun Pharma, PowerGrid, Maruti Suzuki and HUL were the laggards.
Of the Sensex constituents, 23 closed with gains and 7 suffered losses.
Sectorally, BSE banking, finance, metal and auto indices rallied up to 3.98 per cent, while telecom and healthcare were in the red.
Broader midcap and smallcap indices surged up to 1.63 per cent.
"Indian indices soared with solid gains led by banking, metal and auto stocks due to fall in infection cases.
“The market expects a rapid fall in daily reported Covid cases which helped to ease concerns over extended lockdowns and sharp correction in FY22 estimates.
“Banking stocks took a breather as it helped in soothing asset quality concerns," Vinod Nair, head of research at Geojit Financial Services, said.
According to Binod Modi, head, strategy at Reliance Securities, domestic equities witnessed strong rebound as robust Q4 FY21 earnings and early sign of decline in second wave of daily caseload bolstered investors' confidence.
Elsewhere in Asia, bourses in Shanghai and Hong Kong ended on a positive note, while Tokyo and Seoul were in the red.
On the forex market front, the Indian rupee ended 7 paise higher at 73.22 against the US dollar.
Photograph: Utpal Sarkar/ANI Photo