According to market observers, broadly positive global cues and low crude oil prices also aided in the market's northward movement.
The special hour-long session held every year on Diwali day to mark the start of the Hindu financial year saw the key equity indices the S&P BSE Sensex and NSE Nifty50 make gains.
As per market data, the special session to mark Samvat 2076 witnessed healthy buying in banks, automobile and capital goods stocks.
At around 6.45 p.m., the Nifty50 of the National Stock Exchange (NSE) was trading higher by 55.90 points, or 0.48 per cent, at 11,639.80.
Similarly, the 30-scrip sensitive index (Sensex) made gains during the trading session.
The S&P BSE Sensex, which opened at 39,397.37 points, traded at 39,281.20 points up 223.14 points, or 0.57 per cent, over Friday's close of 39,058.06 points.
"Markets opened up as expected driven mainly by Tata Motors and Infosys," HDFC Securities' Retail Research Head Deepak Jasani told .
"Auto and smallcap indices are up... Some profit taking from high is seen but markets may rise again towards the end."
The special Muhurat trading session, held every year on Diwali, is considered to be auspicious for stock market trading. The trading during the special session commenced from 6.15 p.m. on Sunday and will end at 7.15 p.m.
The Muhurat practice of the stock market is rooted in the belief that trading on this day brings wealth and prosperity throughout the year.
This ritual has been observed for ages by the trading community, as the Hindu new financial year begins on the day after Diwali.
The Indian equity market will be closed on Monday, October 28, to mark Diwali 'Balipratipada'.
( With inputs from IANS )