Strong gains in the rupee which hit a eight month high also boosted sentiments. The Sensex was trading higher by 107points at 22,163 points, another record high while the Nifty rallied 32 points in early trade.
Stocks that gained in trade were banking names like Axis Bank and ICICI Bank which pushed the indices higher. Metal stocks also lent support with Tata Steel and Sesa Sterlite among the early gainers. PSU banking stocks were once again in the limelight with notable gainers being Punjab National Bank, Oriental Bank of Commerce and Bank of Baroda.
Software stocks continued to be subdued in trade on sharp gains in the rupee with Infosys and TCS among the losers. Other Nifty losers were Hero Motor Corp and IDFC.
Tata Motors was up sharply after reports that the company was planning to increase prices of commercial vehicles. Heavyweight, Reliance Industries which had fallen substantially in trade on Tuesday after the gas price hike was deferred gained ground and was trading marginally higher.
Mid cap stocks were also having a good session with notable gainers being Crompton Greaves, Voltas and JSW Steel.
Meanwhile, markets in Asia were mostly trading higher on strong economic data from the US. The Hang Sang and the Seoul composite were both trading with gains in excess of one per cent.