The benchmark indices came off their early highs in the morning session on Monday. The 30-share benchmark was at 49,017, up 138 points or 0,28 per cent. Nifty was up 34 points or 0.24 per cent at 14,406.
Earlier in the day, the BSE benchmark Sensex surged 346.55 points, propelled by a rally in financial stocks. Likewise, the NSE barometer Nifty rose 88.40 points or 0.62 per cent to 14,460.30 in early deals.
On the Sensex chart, UltraTech Cement, Bajaj Finance, HDFC, Axis Bank, Bajaj FinServ, HDFC Bank and Mahindra and Mahindra were the prominent gainers.
On the other hand, RIL, PowerGrid, Asian Paints, ONGC and ITC were among the major laggards.
On Friday, the BSE Sensex had tumbled 746.22 points or 1.50 per cent to finish at 48,878.54, posting its largest single-session drop in a month; while, the NSE Nifty had slumped 218.45 points or 1.5 per cent to 14,371.90. However, a day before the Sensex had breached the historic 50,000-level for the first time ever.
Foreign institutional investors offloaded Indian equities worth Rs 635.69 crore on a net basis on Friday.
Analysts are of the view that markets may remain volatile in this holiday-shortened week amid monthly derivatives expiry, quarterly earnings and the upcoming Union Budget.
The dometic equity markets would remain closed on Tuesday for the Republic Day holiday.
Asian shares were trading higher in afternoon trade on Monday.
Meanwhile, Brent crude, the global oil benchmark, was trading 0.16 per cent higher at $55.30 per barrel on Monday (with inputs from PTI).