The BSE Sensex surged nearly 800 points to 77,559.48, while the NSE Nifty 50 climbed 0.9 percent to 24,203.20 in early trade.
The rally was supported by broad-based buying across banking, IT and auto stocks, while positive trends in Asian markets also lifted domestic sentiment.
Investor confidence improved after fears of a wider conflict in the Middle East eased, with markets reacting positively to signs that tensions in the region had not escalated further.
A decline in global crude oil prices also provided relief to oil-importing countries such as India, reducing concerns over inflation and the country's import bill.
Market participants are also closely tracking corporate earnings, foreign institutional investor (FII) activity and developments surrounding global trade negotiations, which are expected to influence market direction in the coming sessions.