New Delhi, Mar 14 (IANS): The rally in equity indices continued from the past week to settle sharply higher on Monday.

"Markets started the week on a buoyant note and gained over one and a half percent, in continuation of the prevailing rebound. After the flat start, the benchmark indices inched gradually higher, thanks to healthy buying in banking and IT majors and finally ended around the day's high," said Ajit Mishra, VP - Research at Religare Broking.

"Upbeat global cues combined with bargain hunting in index majors are pushing the markets higher. Markets will first react to the inflation data in early trade on Tuesday. Besides, updates on prevailing geopolitical tension and the performance of global markets will remain in focus."

Sensex settled 1.7 per cent or 936 points higher at 56,486 points, whereas Nifty 1.5 per cent or 241 points up at 16,871 points.

"Investments are chipping in as commodities prices are reverting. FIIs selling and crude prices are subsiding, which is expected to continue based on diplomatic developments and provide an edge to the domestic market," said Vinod Nair, Head of Research at Geojit Financial Services.

Among the stocks, Infosys, HDFC Bank, State Bank of India, Axis Bank, and ICICI Bank were the top five gainers among the Nifty 50 companies, rising 3.8 per cent, 3.3 per cent, 3.2 per cent, 3.0 per cent, and 2.9 per cent, respectively.

IOC, ONGC, Hindustan Unilever, Tata Motors, HDFC Life shares, on the contrary, were the top losers on Monday.