BSE Sensex gained 0.76 percent after hitting its highest intraday level in two months, while the NSE Nifty was up 0.8 percent.
The Reserve Bank of India's (RBI) move to tighten gold imports again on Monday with an eye to cut a record current account deficit (CAD) is seen as a broader positive for equities, dealers say.
Consumer goods companies continue to make record highs as funds opt for traditionally defensive stocks in an uncertain environment underscored by the rupee's volatility.
ITC Ltd shares are up 1.5 percent after touching an all-time high of 375.25 rupees while Hindustan Unilever Ltd (HUL) shares rose 2.4 percent after touching a record high of 720 rupees. Blue chip bank stocks gain on value buying after recent sharp falls, with a 6.4 percent fall in NSE's banking sub-index last week.
ICICI Bank Ltd gains 1.7 percent, while HDFC Bank Ltd edges up 0.7 percent.
Yes Bank Ltd gains 4.25 percent a day ahead of its.