The Sensex was trading higher by 173 points, while the Nifty gained 45 points in early trade. Shares of Sun Pharma, IDFC, Ambuja Cements and ACC were amongst the top gainers in trade.
Banking stocks that led the rally were Union Bank of India, Bank of India, ICICI Bank, Federal Bank, Bank of Baroda and Yes Bank.
Shares of government owned mining company NMDC, was marginally higher by 1% ahead of the government's stake sale in the company on Wednesday.
Shares of Bharti Airtel was marginally higher ahead of IPO of group company Bharti Infratel's proposed IPO. Indian Oversesas Bank surged more than 1%, after the company announced raising money through a bond programme.
Oil India was up after the company said it was planning to set up a liquefied natural gas ( LNG) receiving terminal in India.
Heavyweight, Reliance Industries also supported the index by jumping 1% in early trade, while software stocks continue to remain subdued.
Markets are expected to eagerly track the passage of crucial bills in parliament and are hence expected to be volatile.
Meanwhile, markets in Asia were trading mixed with the Shanghai Composite trading lower, while most of the other markets were up.