The Sensex was trading higher by 83 points, while the Nifty rallied 19 points in early trade. Banking stocks continued to gain for a second day in a row with Canara Bank trading higher by more than one per cent, while other stocks that rallied were Yes Bank and Union Bank of India.
Dr Reddy's Labs gained almost two per cent after the company launched a generic drug in the US. Other Nifty gainers were Bharat Heavy Electricals, Gas Authority of India, Tata Power and Tata Steel.
However, Nifty stocks that lost ground in trade were ITC, HDFC and Larsen and Toubro. PSU banking stocks continued their good run with Syndicate Bank rallying two per cent, while other notable gainers were Bank of Baroda and Allahabad Bank.
Tata Motors saw some selling pressure despite reports that the company was in talks with a Chinese car manufacturer to share platforms.
Shares from the tech basket continue to trade higher despite the rupee hitting a new seven week low. Among the stocks that gained were Infosys and HCL Tech.
Shares in Astra Zeneca plunged seven per cent after the company said that it has deferred its delisting from the stock exchanges.
Meanwhile, markets across Asia continued to rally for a third straight day with the Japanese Nikkei trading one per cent higher. Other markets that were trading higher included the Taiwan Weighted and the Hong Kong's Hang Sang.