The Sensex was trading higher by 83 points, while the Nifty gained 27 points in early trade. Among the stocks that saw maximum gains from the Nifty stocks were HDFC, Tata Motors, Ambuja Cements and Tata Steel.
The early losers from the Nifty included Infosys, Ultratech Cement, Grasim and Sun Pharma. Shares of Bharti Airtel which rallied sharply on Monday was trading flat at Rs 309, despite reports of IPO for its tower business.
Reliance Capital surged 2.6% after reports that the company has begun talks to sell 26 per cent equity in its general insurance arm to a foreign partner.
Banking stocks saw buying support emerge, except for Punjab National Bank, which dropped marginally.
Shares of Deccan Chronicle hit a 52 week low on sustained selling pressure in the counter.
Meanwhile, shares in Asia were trading higher, after strong closings in Europe and the US, on hopes that there might be a solution to the fiscal crisis in the US.