Benchmark indices gained ground in trade on hopes that there would be an interest rate cut by the Reserve Bank of India (RBI) in its forthcoming policy meet after CPI inflation fell sharply.
Banking stocks were the top gainers in trade on hopes of the rate cut. Union Bank of India was the leading gainer from the banking space along with Axis Bank, ICICI Bank, Bank of Baroda and State Bank of India.
Software stocks also rallied in trade following a drop in the value of the rupee. HCL Tech, Infosys and TCS were among the gainers in trade.
Sun Pharma Advanced Research Company climbed almost 2 per cent after the company's board approved a Rs 250 crore rights issue of shares.
Mid cap stocks also gained ground in trade with Jubilant Food and IDBI Bank among the gainers in trade.
Metal stocks were very weak in trade with Hindalco and Vedanta among the losers.
Meanwhile, most of the Asian markets were trading higher, except the Shanghai Composite which fell in trade.