Indian financial markets closed with minor gains on Monday as investors traded cautiously ahead of the release of September industrial production and manufacturing output data.

Led by private banks and media stocks, Sensex closed 21.47 points higher at 40,345.08 while the broader Nifty finished 4.80 points up at 11,912.95.

"Market was range bound as investors stand side-lined from expensive large caps while mid and small caps saw some buying interest based on Q2 results & reasonable valuation," said Vinod Nair, Head of Research, Geojit Financial Services.

"Investors are keen on CPI inflation data tomorrow (Tuesday), consensus is showing further rise to 4.35 per cent due to increasing vegetable prices which may impact RBI's next policy outcome," Nair added.

Besides, scrips of HDFC Asset Management and Indraprastha Gas Limited on Monday surged to its 52 week high on the NSE after being included in the Morgan Stanley Capital International (MSCI) index last week. ICICI Prudential Life and DLF also traded near 52 week high, a technically crucial level.

Other entries to the index, Info Edge gained 2.07 per cent but was short of touching its 52 week high while Siemens India ended 1.77 per cent higher.

The top Nifty gainer were Yes Bank, up by 5.73 per cent to Rs 72.90 apiece and Zee Limited which gained 6.16 per cent to Rs 305.20 per share.