Benchmark index Sensex fell a whopping 900 points from day's high on March 24 after making a 2% gap-up opening on March 24 amid de-escalation hopes after US President Donald Trump hinted at talks about a resolution with Iran. The markets pared their gains because Tehran’s denial of any talks kept uncertainty high.

Brent crude dropped 11% on Monday after Trump said he had ordered a delay to attacks on Iran's power plants, adding the U.S. had held productive talks with unnamed Iranian officials. US equities advanced, the dollar dropped and US Treasury yields declined.

Part of these moves reversed in Asian trading, with Brent recovering nearly 4%. Asian equities rose, though they were well off their highs.

Iran's denial of talks with the US, coupled with a Wall Street Journal report that Saudi Arabia and the UAE are inching towards joining the fight against Tehran dented the positive sentiment triggered by Trump’s remarks.

At 09:54 am, the Sensex was up 693.34 points or 0.95% at 73,389.73, and the Nifty was up 221.90 points or 0.99% at 22,734.55. About 2,643 shares advanced, 799 shares declined, and 156 shares were unchanged. The intraday high of Sensex was 74,212.47. The market gains were led by bank, auto shares.

All 16 major sectors logged gains at the open. The broader small-caps and mid-caps added 1.6?ch.

Trump said on Monday that he had ordered the military to postpone strikes against Iranian power plants following "productive conversations" with Tehran.

However, Iran's Parliamentary Speaker posted on social media that no talks had been held with the US, contradicting Trump's announcement.

"Though there is still some uncertainty and the Strait of Hormuz remains closed, markets have turned cautiously optimistic after the U.S. suspension of air strikes on Iran," said analysts led by Seshadri Sen of Emkay Global.

Indian share benchmarks have fallen about 9.5% this month, as elevated crude prices and energy supply worries battered markets and intensified a foreign exodus.

Emkay sees a sharp near-term rebound in the Nifty with oil refiners, private banks, non-bank lenders, and autos as "the best ways to play the recovery".

Among stocks, HDFC Bank rose 1.1%, after it appointed external law firms to review the resignation letter of former part-time chairman Atanu Chakraborty. The heavyweight lost 11.7% over the last three sessions, losing $16.3 billion in market value, after Chakraborty's abrupt exit.

Shriram Finance and Eicher Motors were the top gainers in the Nifty 50 index, up over 3?ch. Shares of Asian Paints rose over 2?ter several media reports said the company was planning to raise prices of its products by 6-8%. Automobile companies Bajaj Auto, Mahindra & Mahindra, Maruti Suzuki India, and Tata Motors Passenger Vehicles rose 1-3%.

InterGlobe Aviation, Titan Co., Eternal, Trent, Adani Enterprises, UltraTech Cement, Apollo Hospitals Enterprises, and Larsen & Toubro rose 2-3%. In contrast, state-owned energy companies Coal India and Power Grid Corp. of India were the worst hit in the index, down around 2?ch.