The Sensex was trading higher by 55 points, while the Nifty gained 8 points at 5671 points at 9.25 am IST. Among the early gainers in trade were Maruti Suzuki, Mahindra and Mahindra and Ranbaxy Laboratories, Axis Bank and Tata Steel.
Shares that lost ground from the S&P CNX Nifty stocks were Infosys, Steel Authority of India and IDFC.
Shares of Larsen and Toubro gained after the company bagged an order of Rs 1200 crores across various segments. Shares of MindTree was up almost 2% after the company said that it was chasing some big deals.
SKS Microfinance gained 2% after Morgan Stanley bought about 45 lakh shares in the company.
Banking shares were subdued and were trading flat with State Bank of India, ICICI Bank and Axis Bank little changed.
Meanwhile, markets in Asia were all trading in the green, despite poor closing in Europe. The Hong Kong' Hang Sang, the Korean Kospi, and Singapore's Strait Times were all trading marginally higher.
Indian markets are expected to remain volatile today ahead of the derivatives expiry.