The Sensex was trading higher by 158 points at 18696 points, while the Nifty gained 47 points. Among the gainers in early trade were Sesa Goa, ICICI Bank, Bhel and BPCL.
Hindustan Copper which was down 40% in two trading sessions, shed another seven per cent to trade Rs 156.
SpiceJet which had rallied sharply on Monday continued to gain, while Jet Airways lost ground in trade. Among the only Nifty losers were Power Grid, Kotak Mahindra and Sun Pharma.
Banking shares continued to be in the limelight with State Bank of India, Axis Bank, Oriental Bank, Union Bank and Allahabad Bank amongst the gainers.
Heavyweights, Reliance Industries and ITC also supported the markets in early trade. Auto stocks like Maruti and Mahindra and Mahindra were also trading marginally up.
Meanwhile, markets in Asia were trading higher, except for the Chinese market which was trading marginally lower. Hong Kong's Hang Sang, Korean Kospi, Singapore's Strait Times and the Japanese Nikkei were all trading higher.