The Sensex and the Nifty rallied in trade a few hours ahead of the Union Budget to be delivered by Union Finance minister Arun Jaitley later today. The Sensex was trading with gains of 203 points, while the Nifty was higher by 58 points in trade.
PSU banking stocks also saw some buying interest on hopes that there would be fresh capital infusion for the sector.
Among the PSU banking stocks that gained ground in trade were Punjab National bank, Syndicate Bank and Bank of India.
Auto stocks were in the limelight on hopes that there would be some tax sops for the sector. Stocks that rallied were Mahindra and Mahindra and Maruti.
Stocks from the gems and jewellery sector also saw some buying support with Titan and Gitanjali Gems among the early gainers.
Markets are expected to see bouts of volatility ahead of the presentation of the Budget. Dealers say that the volumes maybe low because of the absence of FIIs, which may further add to volatility.