The blue-chip NSE Nifty 50 index ended up 0.78% at 16,624.60, and the benchmark S&P BSE Sensex ended 0.73% higher at 55,958.98.
Shares of Bajaj Finserv jumped as much as 8.6% to hit a record high before ending up 7.7%. Shares of peer Bajaj Finance also ended higher, at 3.38%.
The Nifty Bank index advanced 1.67%, driven by a 2.3% gain in HDFC Bank. The financial services index rose 1.39%. The Nifty metals index ended the session up 2.9%.
India's Nifty Smallcap 100 and Nifty Midcap 100 ended the day 2% and 1.43% higher.
Among other stocks, shares of India's Optiemus Electronics rose 4.9% after it partnered with Taiwan's Wistron Corp to build smartphones and laptops. The partnership is expected to yield revenues of 380 billion rupees ($5.13 billion) over five years for Optiemus, the company said.
Shares of ABB India ended 1.31% higher after the company said it had expanded manufacturing capacity for low voltage motors by 20% at its Faridabad facility, which is powered by renewable energy.
Global equities, bond yields and oil rose on Tuesday as a bounce in China's tech sector, positive U.S. vaccination news and easing worries about the U.S. tapering stimulus lifted sentiment ahead of a speech later this week by Fed Chair Jerome Powell. [MKTS/GLOB]
(Reporting by Vishwadha Chander in Bengaluru; Editing by Shailesh Kuber)