Firm Asian cues on easing fears about future of German giant Deutsche Bank also gave sentiment here a leg-up.
Rising for the second day, the 30-share index advanced 160.79 points, or 0.57 per cent, to 28,026.75, with auto, realty, healthcare, metal, capital goods and consumer durable stocks leading the gainers.
The rupee strengthened by 13 paise against the dollar to 66.48 in early trade in the forex market.
The gauge had gained 38.43 points in the previous volatile session on Friday.
The NSE Nifty perked up 60.85 points, or 0.70 per cent, to 8,672.
Brokers said widening of bets by investors and funds ahead of the monetary policy review due tomorrow and heavy purchases by domestic financial institutions added to the positive mood.
Auto stocks were in the limelight amid encouraging September sales data announcement.
Maruti Suzuki was trading higher by 3.39 per cent at Rs 5,664.70 and Hero MotoCorp was up 2.74 per cent at Rs 3,508.05 while Bajaj Auto gained 2.39 per cent at Rs 2,899.70.
Tata Motors advanced 1.88 per cent at Rs 544.80 and M&M was trading 0.79 per cent higher at Rs 1,417.
Among other Asian markets, Hong Kong's Hang Seng was up 1.38 per cent while Japan's Nikkei surged 1.12 per cent in early session today. Financial markets in China are closed today for a public holiday.
The US Dow Jones Industrial Average ended 0.91 per cent higher on Friday.