Leading the set of gainers from the Nifty were banking stocks including the likes of ICICI Bank, Union Bank, Canara Bank, Punjab National Bank and IDBI Bank.
Other Sensex stocks that gained in early trade were Coal India, Grasim and NTPC. Stocks that lost ground in early trade were Sesa Sterlite, TCS and Wipro.
Shares in Reliance Industries were trading higher despite reports that the government has slapped an additional penalty of $579 million on the company.
Coal India was trading higher after reports that the Mahanadi Coalfields, a unit of Coal India Ltd resumed operations at three of its mines in Odisha state.
Mid cap stocks also bounced back smartly with most of the PSU banking stocks gaining ground. Other stocks that saw buying interest were Jain Irrigation, Voltas and UPL.
Realty stocks also saw some buying interest with notable gainers from the space being HDIL, Unitech and Sobha Developers.
Shares in HUL gained after falling sharply on Monday. Meanwhile, markets in Asia surged following strong closing across the US and European markets.