The benchmark Sensex was seen trading at 16,880 points up by 161 points and Nifty was trading at 5,117 up by 49 points at 9.30 am IST.

The Spanish government was seeking a financial assistance from the euro zone which has now agreed to provide a 100 billion-euro (USD 125 billion) bailout package. Spain will be the fourth largest country to seek rescue from the euro zone.

Markets sentiment was also boosted after China's economic data was not as bad as expected. The Nikkei 225 was trading up by 2.05%, while the Hang Sang was up 2.06%. The Shanghai Composite was higher by 0.32%.

The gainers in morning trade were Reliance Infrastructure, Sterlite Industries, Tata Power and Jaiprakash Associates.

The only stocks that failed to lure investors in early trade was HCL Technologies.