The Sensex was trading higher by 152 points at 17,351 points at 930 am IST, while the Nifty was trading higher by 51 points.
Among the stocks in the S&P CNX Nifty that saw sharp rally in early trade were Reliance Industries, SAIL, Tata Motors and Tata Steel, all of which gained more than 2%. Among the stocks that were trading with a slight negative bias were Dr Reddy's Laboratories, ONGC and Wipro.
In Asia all of the major indices were up, following strong closings in Europe and the US on Friday. The Taiwan Weighted was up 1.14%, while the Korean Kospi was up more than 2%, and the Hang Sang was also up more than 2%.
Markets are expected to remain buoyant today and would now look for further cues. Domestically, the markets are eagerly awaiting reforms process, which has failed to gather any momentum after Pranab's departure.