After suffering its longest weekly losing streak in 25 years, the Indian stock market staged a sharp rebound on Monday, with the Sensex and Nifty gaining in early trade.

The IT sector also contributed to the rebound, with the IT index gaining 1.1 per cent. (Reuters/Francis Mascarenhas)

Nifty 50 climbed 0.56 per cent to 22,545.25, while Sensex advanced 0.62 per cent to 72,359.72 as of 10:06 am, as per figures cited in a PTI news agency report. Thirteen of the 16 major sectors ended higher, while the broader mid-cap and small-cap indices gained around 0.8 per cent and 0.6 per cent, respectively.

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Financial stocks led the recovery after several banks reported encouraging quarterly business updates.

HDFC Bank gained after Anup Bagchi was named its next MD and CEO for a three-year term beginning October 27. Punjab National Bank rose after reporting 14.8 per cent growth in global advances in the September quarter, while Bank of Baroda rose 2 per cent after its quarterly advances grew 18 per cent.

Bajaj Finance was another major winner, rising 4.3 per cent after reporting an 11 per cent year-on-year increase in new loans.

India is heavily dependent on imported crude oil. The recent pullback in oil prices therefore helped improve investor sentiment.

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A less aggressive approach by the US Federal Reserve is positive for emerging markets like India, as expectations of fewer rate hikes can ease pressure on bond yields and make Indian assets more attractive to investors.

Better-than-expected revenue growth, bookings and commentary from Accenture provided a positive read-through for Indian IT companies, Reuters quoted analysts from PhilipCapital as saying.

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The prolonged correction pushed the benchmark indices into technically oversold zone, increasing the possibility of a short-term rebound.

Together, these factors helped the Indian market rebound after weeks of decline. Reportedly, analysts cautioned that elevated US Treasury yields, continued foreign outflows and geopolitical risks could limit the market's upside.

(With inputs from Reuters and PTI)