The Nifty has gained about 12% so far this month on the back of upbeat vaccine trial results and strong inflows from foreign institutional investors (FII).

Monthly FII inflows of $6.5 billion into Indian equities in November have so far been the best since at least December 2006, according to Refinitiv Eikon data.

The Nifty closed 1% higher at 13,055.15, while the Sensex ended 1.01% higher at 44,523.02.

All Nifty sub-indexes ended higher, with banks leading the pack. HDFC Bank and ICICI Bank were the top two boosts to the Nifty 50, rising 3.5% and 2.3%, respectively.

On the vaccine front, AstraZeneca's encouraging interim results for its COVID-19 shot were followed on Monday by manufacturer Serum Institute's announcement that it would focus first on supplies to India.

Astra's shot, if approved, could see wider distribution, especially in developing nations including India, since it can be stored in fridge temperature, as opposed to freezers required for vaccines from Pfizer and Moderna.

Among companies, Future Retail ended 10% higher, gaining for a fourth straight session.

Auto parts maker Bosch Ltd jumped 9.8%, while Maruti Suzuki, India's top automaker, climbed 2.4%.

Global markets were also higher on Tuesday after U.S. President-elect Joe Biden was given the go-ahead to begin his White House transition.

(Reporting by Sachin Ravikumar in Bengaluru; Editing by Arun Koyyur)