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At 9:26 am, the Sensex traded 744.46 points - or 2.30 per cent - higher at 33,168.56 while the Nifty was up 213.75 points - or 2.23 per cent - at 9,794.05.
Forty seven stocks in the Nifty basket of 50 shares moved higher at the time. JSW Steel, Tata Steel, Axis Bank, Bajaj Finserv, Bajaj Finance and Vedanta - trading between 4.45 per cent and 7.82 per cent higher - were the top percentage gainers.
HDFC Bank, HDFC, ICICI Bank and Reliance Industries alone accounted for a gain of more than 350 points in the Sensex.
The government permitted restaurants and malls to reopen from June 8, but extended lockdowns in high-risk zones until June 30 as a record high number of cases were detected nationwide on Saturday.
Official data on Friday showed India's gross domestic product (GDP) expanded 3.1 per cent in the January-March period, its slowest pace in at least eight years.
Direct fiscal stimulus measures announced this month, mainly to provide subsidised credit and grain to small businesses and migrant workers respectively, are estimated at around 1 per cent of the GDP and will not be sufficient to drive an economic recovery, according to economists.
Equities elsewhere in Asia soared to three-month highs, with MSCI's broadest index of Asia Pacific shares outside Japan last seen trading 1.97 per cent higher. Japan's Nikkei 225, China's Shanghai Composite, Hong Kong's Hang Seng and South Korea's KOSPI indices were up 1.18 per cent, 1.76 per cent, 3.41 per cent and 1.42 per cent respectively at the time.
The E-Mini S&P 500 futures were up 0.02 per cent in early Asian trade, indicating a flat to positive start for Wall Street on Monday.
On Friday, the S&P 500 and the Nasdaq Composite benchmarks had climbed up 0.48 per cent and 1.29 per cent respectively, but the Dow Jones Industrial Average index ended 0.07 per cent lower.
Earlier that day, the S&P BSE Sensex index had closed 223.51 points (0.69 per cent) higher at 32,424.10 and the broader NSE Nifty 50 benchmark settled at 9,580.30, up 90.20 points (0.95 per cent) from the previous close, as the markets extended gains to a third straight day.