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BENGALURU -Indian shares extended gains from last week to end more than 1% higher on Monday, as oil prices declined on hopes of progress in Russia-Ukraine peace talks, with investors eyeing the country's retail inflation data due later in the day.

The blue chip NSE Nifty 50 index closed up 1.45% at 16,871.30, while the benchmark S&P BSE Sensex gained 1.68% to end at 56,486.02.

Both indices have shed about 3% each this year due to a combination of overvaluation fears, consistent selling by foreign investors, a miss on economic growth estimates and the Russia-Ukraine crisis.

Global markets rose on Monday, while oil prices extended last week's decline after both Russia and Ukraine gave their most upbeat assessment yet of prospects for talks. [MKTS/GLOB]

The slide in oil prices is a positive for India in terms of containing inflation, as the country is the world's third biggest oil importer and consumer.

Investors' will be looking out for February retail inflation data, which likely slipped marginally, according to a Reuters poll, with surveyed economists also warning about the impact of surging oil prices. The report is due later in the day.

The Nifty Bank Index gained 2.22%, helped by HDFC Bank, which added 3.3% after saying on Saturday that the central bank had lifted restrictions on some of its activities under its digital programme.

Among individual stocks, digital payments company Paytm slid 12.9% after the central bank barred Paytm Payments Bank from taking on new customers and ordered a comprehensive audit of its IT systems.

Jubilant FoodWorks, the Indian franchise partner of Domino's Pizza, fell as much as 12.2%. Several brokerages downgraded their price target for the company after its top boss resigned on Friday.