The Sensex and the Nifty gained further ground in trade led by a smart recovery in metal names. The Sensex was trading higher by 174 points, while the Nifty gained 52 points in early trade.
Leading the set of gainers from the Sensex were metal names like Hindalco, Tata Steel and Sterlite Industries.
Coal India was down 2 per cent after Cabinet gave its consent for an ordinance to end the coal block stalemate.
Mid cap stocks were trading higher led by gains in Havells India and Power Finance Corporation.
ONGC which had rallied sharply on Friday after the government's diesel price deregulation was trading with marginal losses.
The other Nifty losers in trade were Mahindra and Mahindra and Reliance. Gail continued to power ahead on oil and gas reforms and was up 4 per cent.
Meanwhile, markets in Asia were trading marginally lower, led by losses in the Japanese Nikkei.