Indian shares rose about 1 percent on Monday after closing out 2021 with their best annual gain in four years, led by auto stocks on the back of strong monthly sales data amid a spike in COVID-19 cases.

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The NSE Nifty 50 index advanced 0.92 percent to 17,513.70 by 0458 GMT, while the benchmark S&P BSE Sensex jumped 0.98 percent to 58,823.26.

Auto stocks led the gains, with the Nifty auto index rising to a three-week high. Maruti Suzuki, the country's largest carmaker, rose 2.9 percent after recording its highest ever monthly export sales in December.

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Tata Motors climbed 3.6 percent after posting a 26 percent growth in total domestic sales. Eicher Motors jumped 3.5 percent as domestic sales of its commercial vehicles rose 27.6 percent.

"Markets have opened higher, carrying forward the momentum seen in the strong closing on Friday," said Deepak Jasani, head of retail research, HDFC Securities.

"Indian shares are likely up in anticipation of fresh inflows from foreign institutional investors, most of whom are still on holiday."

Daily coronavirus cases rose for a sixth straight day as the country saw a fresh wave of infections during the holiday weekend. India witnessed 33,750 new COVID-19 cases in the past 24 hours, the highest since Sept. 18, health ministry data showed.

Speaking on the spike in COVID-19 cases, Jasani said the rise is not unique to India and people have gotten used to living with COVID-19 variants.

"Most COVID-19 cases we're seeing now are mild... unless there is an explosion in the number, traders will take it in their stride," Jasani said.

Among individual stocks, Zomato jumped 2.9 percent after the food delivery platform said it received more than 2 million orders for the first time on Friday.

Shares of Coal India were up 4 percent after the state-run miner reported a 3.3 percent growth in December production.