Indian shares closed at their highest level since September as Axis Bank surged on a media report it would become the target of a takeover, although telecom firms fell after Reliance Jio Infocomm unveiled a sharply discounted tariff plan.
The benchmark Sensex closed up 0.35 percent at 28,761.59, its highest close since Sept. 22.
The broader Nifty ended 0.32 percent higher at 8,907.85, its highest close since Sept. 9.
Axis surged 4.8 percent after CNBC-TV 18 reported that the lender could attract interest from other banks, citing unidentified sources. Axis Bank on Monday denied news reports of a merger with Kotak Mahindra Bank.
Bharti Airtel ended 3.33 percent lower after rival Jio unveiled a plan that would offer sharply discounted data for a year for customers who sign up under the plan.
(Reporting by Tanvi Mehta in Bengaluru; Editing by Biju Dwarakanath)