Sensex closes more than 2% higher as financial stocks lead charge

Indian shares closed more than 2 percent higher on Monday, lifted by financial stocks on optimism about quarterly earnings, while market sentiment was further bolstered by the Reserve Bank of India's liquidity injection plans.

The broader NSE Nifty ended 2.2 percent higher at 10,250.85 while the benchmark BSE Sensex closed up 2.15 percent at 34,067.4.

ICICI Bank, up 10.7 percent at its highest close since Jan. 31, was the biggest boost to the index. The lender reported an improvement in asset quality in the second quarter on Friday.

Indiabulls Housing Finance Ltd surged 12.8 percent while the Nifty PSU Bank index was up 8 percent, driven by an 8 percent jump in public-sector lending giant State Bank of India.