Indian shares advanced on Monday, led by an uptick in financials while improved global cues due to a weekend debt ceiling deal in the US added heft.

The blue-chip Nifty 50 index was up 0.63 per cent at 18,616, while the benchmark S&P BSE Sensex rose 0.70 per cent to 62,939.10 in early trade.

Ten of the 13 sectoral indexes logged gains with high weightage financials rising over 1 per cent.

ICICI Lombard General Insurance Ltd surged 10 per cent after ICICI Bank's board approved raising its stake in the company by 4 per cent.

Auto index rose 0.8 per cent powered by 4 per cent gains in Mahindra & Mahindra Ltd. The stock is the top gainer on the Nifty after reporting a rise in March quarter profit.

On the other hand, shares of Oil & Natural Gas Corporation Ltd fell nearly 4 per cent after reporting a loss in the fourth quarter.

"The outlook is positive, and investors should buy on dips," said Deven Mehata, equity research analyst at Choice Broking. "Traders may feel the fear of missing out on the rally and may buy on the higher side, but it's advisable to buy on dips."

Sentiment improved after US President Joe Biden and House Speaker Kevin McCarthy forged an agreement over the weekend to avert a default to suspend the $31.4 trillion debt ceiling until 2025, ahead of the June 1 deadline. The deal will have to pass through the US congress. Asian markets edged higher.

The benchmark Nifty 50 is closing in on the record high of 18,887.60 levels. Sustained foreign inflows into Indian equities have supported the rise.

Foreign institutional investors (FIIs) bought ₹350 crore of Indian shares on Friday. FIIs have been net buyers in Indian stocks in 21 of the last 22 sessions.