Banks led a smart recovery in the last hour of trade to help the Nifty close above 10,800 with a gain of 81 points.

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The Sensex recovered 345 points from lows to close 257 points higher at 35,690.

HDFC twins were the biggest contributors to the Nifty with 33 points and the Nifty Bank was led by HDFC Bank and Axis Bank, with both the banks contributing 158 points.

Here's what you should know before the opening bell

China's central bank announced Sunday it would reduce the reserve requirement ratio (RRR) for most banks by 50 basis points to free up funding for small firms as a trade war with the US looms.

Senior officials of 11 public sector banks (PSBs) will appear before the Parliamentary Standing Committee on Finance on Tuesday on the issue of the banks' massive non-performing assets (NPAs), or bad loans, and increasing number of fraud cases, according to PTI's official sources.

Initial share sales in two Indian companies - RITES and Fine Organics - aiming to raise a combined 10.66 billion rupees ($157.20 million) saw strong interest from investors on the last day of sale on Friday.

Brent crude oil prices fell by more than 2 percent early on Monday as traders factored in an expected output increase that was agreed at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday.

The government is working to improve theregulations for auditors and corporate professionals as it looks to strengthen the "fabric of corporate governance" in the country, according to Union Minister P P Chaudhary.

Industry chamber CII said overseas investments by Indian companies are likely to go up given the stable market conditions and the significant impact created by Indian companies on local economies.

Oil prices were supported after OPEC and non-OPEC producers agreed on a modest increase in oil production from next month, without announcing a clear target for the output increase, leaving traders guessing how much more will actually be pumped.

The US dollar ended cheaper against the rupee at Rs 67.83 per dollar and the pound sterling finished higher at Rs 90.14 at the close of the Interbank Foreign Exchange (forex) market