Posting its biggest single day gain in last one year, the Sensex vaulted 610.80 points or 1.83 per cent to end the day at 33,917.94.
On Friday, a sudden sell-off during the last hour of trade trimmed the day's entire gains and led the equity indices to close trade on a flat note with marginal losses.
The investors factored in a favourable showing in the inflation and factory output data, slated to be released later in the day.
China data: China's industrial production, retail sales and fixed-asset investment numbers will be released on Wednesday and are are likely to point to slower growth, according to Bloomberg Economics forecasts.
Indian shares jumped almost 2 percent on Monday, in line with a global rally after the latest U.S.jobs report assuaged fears around inflation and faster rate hikes, while investors back home awaited inflation numbers due later in the day. The BSE mid-cap index ended higher by 0.76 per cent and small-cap index 0.56 per cent. On BSE, 1,370 shares advanced and 1,344 shares declined.
Global markets rallied after the United States data indicated that non-farm payrolls jumped from last month, but annual growth in average hourly earnings slowed after a spike in January, easing fears of inflation and speculation the Federal Reserve would project four rate hikes instead of the current three.
"Global stocks gained as worldwide trade war concerns waned and were replaced by economic optimism following a stronger USA jobs report", said Karthikraj Lakshmanan, senior fund manager at BNP Paribas Mutual Fund.