New Delhi,  Keeping the opening session gains intact, India's key equity indices -- Sensex and Nifty -- settled sharply higher on Monday, driven by gains in HDFC and HDFC Bank as the two announced a merger deal which lent broad-based support to the domestic financial markets.

Notably, by closing the first session of the week on a positive note, the benchmark indices managed to extend their bull run from the previous week.

Sensex closed 2.3 per cent or 1,335 points up at 60,612 points, whereas Nifty 2.2 per cent or 383 points up at 18,053 points.

Among the sectoral indices, all traded in the green on Monday with Nifty bank and financial rallying the most.

"The mega-merger news of the HDFC twins and the rare sight of a 15 per cent up-move in them today at a point in time propelled benchmark indices 2.5 per cent higher with good support from metal stocks," said S. Ranganathan, Head of Research at LKP securities.

Among the stocks, HDFC Bank, HDFC, Adani Ports, HDFC Life, and Kotak Mahindra Bank were the top five gainers among the Nifty 50 companies, rising 9.8 per cent, 9.1 per cent, 4.1 per cent, 3.7 per cent, and 3.3 per cent, respectively.

On the contrary, Infosys, Tata Consumers, Titan, and JSW Steel were some of the top losers on Monday, NSE data showed.