Infosys gained 2.1 per cent to Rs 2,018.05, its highest close in more than four years, after its board approved a second sponsored American Depositary Share offer which traders hoped would be priced aggressively.

The 30-share Bombay Stock Exchange index rose 0.66 per cent to 5,930.47 points, its highest close since March 8, after rising nearly 4 per cent last week. Gainers outpaced losers 1,101 to 859 in active trade of 168 million shares.

The 50-issue National Stock Exchange index rose 0.57 per cent at 1,862.80 points.

"There don't seem to be many negative factors, and the lower crude oil prices and strong foreign fund flows are keeping the mood upbeat," said Arun Kejriwal, chief executive of Kejriwal Research & Investment Services.

"We may see some correction coming in over the next few sessions, maybe some resistance before we hit the 6,000 mark."

US light crude futures edged lower on Monday to $48.85 a barrel, and dealers expect it will slip to below $48.

That boosted Reliance Industries Ltd, the biggest private-sector refiner, which rose 0.6 per cent to Rs 543.

Auto makers rose in expectation of robust sales in the festive season, with Tata Motors Ltd, the biggest bus and truck maker, rising 2.1 per cent to Rs 429.70 and Hero Honda Motors Ltd, the biggest motorcycle maker, up 1.9 per cent at Rs 435.40.

Indian courier firm Blue Dart Express Ltd rose 5.6 per cent to Rs 320.25 after global logistics company DHL agreed to buy a 68.2 per cent stake in the firm at Rs 350 per share and planned an open offer for the rest.

India's top mortgage lender, Housing Development Finance Corp, rose 1.6 per cent to Rs 678.85 after it said on Monday it would raise its housing loan rates by about 50 basis points after Diwali.

But drug maker Ranbaxy Laboratories Ltd fell 2.5 per cent to Rs 1,121.55 on news that Schwarz Pharma AG had stopped a clinical Phase II trial of its prostate drug pamirosin.

State-run refiners, which had rallied on last week's move to raise petrol and diesel prices, slipped on fears that there might be a rollback. Bharat Petroleum Corp Ltd fell 1.8 per cent to Rs 390.30 and Hindustan Petroleum Corp Ltd fell 1.2 per cent to Rs 337.95.