The Sensex was trading higher by 181 points, while the Nifty gained 63 points in trade. Banking stocks were on fire after with Yes Bank gaining 13 per cent, Punjab National Bank gaining 6 per cent, Canara Bank up 9 per cent, IndusInd Bank rallying 9 per cent and Bank of Baroda rising 8 per cent.
IT stocks which have been rallying in the past few trading sessions saw selling pressure for a second day in a row with TCS and Infosys both losing ground.
FMCG stocks were subdued with Hindustan Unilever and ITC trading flat.
The rate sensitive auto stocks jumped along with banking stocks with notable gainers from the space being Bajaj Auto, Mahindra and Mahindra and Maruti Suzuki.
Pharma stocks which had also lost ground in the last few trading sessions were trading flat with Sun Pharma, Cipla and Lupin trading marginally higher.
Fortis Healthcare Ltd, was trading higher after the completed the sale of its entire 65 per cent stake in its Vietnam-based hospital chain.
Sesa Goa and Sterlite which witnessed a substantial rally in the last few days were once again trading higher along with other steel stocks like Tata Steel and Jindal Steel.
Meanwhile, markets in Asia were trading marginally lower ahead of the minutes of the FOMC meet to be revealed later today.
The Korean Kospi was down 1 per cent, while the Japanese Nikkei hit a 2-month low.