Except for IT and TECK (technology, media and entertainment) all the sectors were in the green, led by finance and banking counters. Auto and realty sectors also recovered, gaining over three per cent.
The domestic currency traded below the 74-a-dollar mark. At 12.21 p.m., the rupee stood around 73.79. It closed at 74.12 to a greenback on Thursday.
At 12.51 p.m., the broader Nifty50 of the National Stock Exchange was trading at 10,460.55, up 225.90 points or 2.21 per cent from its Thursday's close.
The S&P BSE Sensex, which had opened at 34,291.92, was trading at 34,742.29, up 741.14 points or 2.18 per cent.
So far, the Sensex has touched an intra-day high of 34,745.88 points and a low of 34,279.78.
The top gainers at Sensex were dominated by auto stocks: Mahindra and Mahindra, up 5.54 per cent at Rs 770.65; Maruti Suzuki up 5.06 per cent at Rs 7,226.45; Bajaj-Auto up 4.52 per cent at Rs 2,638.25 from its previous close.
Major losers included TCS, down 3.22 per cent at Rs 1,916 ; Tata Motors(DVR) down 0.44 per cent at Rs 101.25; Wipro down 0.03 per cent at Rs 312.95 per share.
Moreover, continuous buying by domestic financial institutions also supported the trading sentiment.
Rising for the third straight session, the 30-share index gathered 218.81 points, or 0.63 per cent, to 35,083.91 with all the sectoral indices led by auto, realty, consumer durables, capital goods and bankex trading higher by up to 1.15 per cent.
The gauge had rallied 864 points in the previous two sessions.
The NSE index Nifty too climbed 60.70 points, or 0.58 per cent, to trade at 10,573.20.
Brokers said increased buying by investors ahead of quarterly earnings from Infosys and a few other bluechip companies later in the day and a firming trend at other Asian bourses after a week of heavy losses, buoyed trading sentiment here.
Major gainers were Asian Paint, IndusInd Bank, Adani Ports, M&M, HUL, ICICI Bank, Yes Bank, Maruti Suzuki, SBI, Tata Motors, ONGC, Vedanta Ltd, HDFC Ltd, Tata Steel, Bharti Airtel, Hero MotoCorp, Infosys and Bajaj Auto, rising by up to 2.80 per cent.
Domestic institutional investors (DIIs) bought shares worth Rs 294.78 crore, while foreign institutional investors made purchases worth Rs 67.86 crore on Monday, as per provisional data issued by the stock exchanges.
Among other Asian markets, Japan's Nikkei rose 0.61 per cent, Korea up 0.03 per cent and Singapore gained 0.11 per cent in their late morning trade. Hong Kong's Hang Seng, however, was down 0.24 per cent.
The US Dow Jones Industrial Average shed 0.35 per cent on Monday.