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A man looks at a screen displaying news of markets update inside the Bombay Stock Exchange (BSE) building in Mumbai, India June 20, 2016.Reuters file

Indian stock markets opened October trading on a positive note with both the benchmark indices — the BSE Sensex and the NSE Nifty — ending Monday's trading with gains of about 1.40 percent each. The rally led by realty, auto and power stocks was aided by easing tensions between India and Pakistan after the national security advisers (NSAs) talked to each other.

The gains in indices coincide with the first meeting of the Monetary Policy Committee (MPC) meeting that began on Monday and will conclude on Tuesday after which the MPC will announce its statement on interest rate, inflation and GDP.

The BSE Sensex gained 377 points, or 1.35 percent, to close at 28,243, while the NSE Nifty ended 127 points higher at 8,738. 

The first meeting of the MPC will deliberate on interest rate and other key policy issues; the committee will be releasing its statement on Tuesday at 2.30pm.

Previously in the day, Sartaj Aziz, adviser to Pakistan Prime Minister Nawaz Sharif on foreign affairs, was quoted as saying by IANS that the NSAs of the two countries — Ajit Doval and his Pakistani counterpart Nasser Janjua — talked to each other to ease tensions in the wake of the recent "surgical strikes" by the Indian Army on terror launchpads along the LoC in Pakistan-occupied Kashmir.

"Both the officials stressed on the need to establish contact to reduce tensions along the Line of Control," Aziz said.

Stocks that gained the most on Monday were from rate-sensitive realty, auto and power sectors. 

Top gainers in the realty space included Prestige Estates (5.14 percent), DLF (4.45 percent), HDIL (4.25 percent) and Sobha (2.62 percent).

Auto stocks that rallied included Maruti Suzuki (3.70 percent to close at Rs. 5,681.85), Hero Motocorp (3.18 percent to end at Rs. 3,523) and Mahindra (2.64 percent at Rs. 1,443.05).

Among other stocks, Adani Ports gained 3 percent to close at Rs. 264.45, while scrips that hit a new 52-week-high on Monday included Hindustan Zinc (Rs. 262.80), SRF (Rs. 1,907.30) and Zee Entertainment (Rs. 588.80).