Positive global cues - especially political developments in Europe - helped the market move towards record closing high.
Equity benchmarks gained momentum and recouped previous week's losses on Monday, with the Sensex rising more than 300 points intraday despite negative market breadth.
Relaxation in tax return filing time after GST implementation that is expected from July 1 and further progress in NPA resolution led the market higher. Positive global cues - especially political developments in Europe - also helped the market move towards record closing high.
The 30-share BSE Sensex was up 255.17 points at 31,311.57 and the 50-share NSE Nifty rose 69.50 points to 9,657.55, aided by banking & financials, metals, FMCG stocks and Reliance Industries.
The broader markets underperformed benchmarks, with the BSE Midcap and Smallcap indices closing flat. About 1,505 shares declined against 1,200 advancing shares on the BSE.
Globally, all eyes are on political events in Europe as negotiations by UK Brexit Secretary David Davis with European Union began, and French President Emmanuel Macron secured a majority in the parliamentary election over the weekend.
European bourses were higher, with the France's CAC, Germany's DAX and Britain's FTSE up 0.5-0.9 percent at the time of writing this article. Asian markets also closed higher, with the Hong Kong's Hang Seng up 1 percent.
Back home, Nifty Bank (up 1 percent) and Metal indices (up 1.75 percent) outperformed other sectoral indices while Pharma and Realty indices closed marginally lower.
HDFC Bank, ICICI Bank, SBI and Axis Bank gained 1 percent each while IDBI Bank was down 3 percent as the Reserve Bank of India directed the bank to initiate Corporate Insolvency Resolution Process (CIRP) for Lanco Infratech under the Insolvency and Bankruptcy Code, 2016.
Lanco, amongst 12 NPA accounts to resolve on priority basis, is the first one to publicly announce that the NPA resolution process started at its end. Lanco Infratech and Amtek Auto were down 20 percent each. Bhushan Steel, Alok Industries, Electrosteel Steels, Jaypee Infra and Monnet Ispat fell 5-16 percent while Jyoti Structures (up 20 percent) and ABG Shipyard (up 4 percent) were gainers.
Tata Steel was the biggest gainer among Sensex stocks, up 3.4 percent as JP Morgan has maintained its overweight rating on the stock after the company announced monetisation of stake in Tata Motors. The Tata Group firm, on June 17, said it had proposed to sell 8,36,37,697 equity shares of face value of Rs 2 each of Tata Motors to Tata Sons.
Reliance Industries was the second leading contributor to Sensex' gains, up 1.5 percent after its subsidiary Jio added 11.2 crore subscribers in May, which was far higher than its peers.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Larsen and Toubro was up 1.6 percent on winning orders worth Rs 2,231 crore. Adani Ports jumped 3 percent after Moody's Investors Service revised to stable from negative the outlook on company's Baa3 issuer and senior unsecured rating.
Kotak Mahindra Bank and Tata Motors (DVR) closed marginally higher after addition in BSE Sensex index.
Dr Reddy's Labs shares were down 0.8 percent after the US Food and Drug Administration issued Form 483 issued with one observation to Srikakulam plant (SEZ) unit I.Among others, ITC, TCS, Asian Paints, SBI and Hero Motocorp were up 1-1.5 percent while Infosys, Tata Motors, Sun Pharma and ONGC fell 0.5-1 percent.