The Sensex was seen trading higher by 72 points, while the Nifty was up 18 points.
Shares of Kingfisher Airlines was up on hopes that Etihad Airways would pick a stake in the company. Realty stocks were trading slightly higher after the Reserve Bank of India allowed some of the companies to raise funds abroad for low cost housing projects. Shares of HDIL, Parsvnath, DLF and Unitech were among the gainers.
Banking stocks were also trading firm ahead of the RBI credit policy. HDFC Bank, ICICI Bank and State Bank of India were higher, while Axis Bank shed marginal gains.
Reliance Infrastructure was down after reports that the second phase of Mumbai Metro project bagged by the company faces termination due to lack of substantial progress.
Top Nifty gainers in early trade were Sesa Goa, Bhel, Hindalco, Jaiprakash Associates and Sun Pharma. Software stocks gained with TCS, Wipro and HCL Tech amongst the gainers.
Nifty stocks that lost ground in trade today were Reliance Infrastructure, Infosys, Lupin, Maruti Suzuki, Bharti Airtel and Jindal Steel.
Meanwhile, markets in Asia were all trading higher with the Japanese Nikkei recording substantial gains. Other Asian markets like the Chinese Shanghai Composite, Hong Kong's Hang Sang and Singapore's Strait Times were up.
Markets are likely to await the outcome of the RBI policy meet slated for 11.00 am and might exhibit volatility through the day.