Benchmark indices gained ground in trade, after a solid rebound in European and US markets, ahead of the US Fed decision on interest rates.
The Sensex was trading with gains of 112 points at 25,432 points, while the Nifty rallied 31 points in trade. Most Asian markets were seeing gains of 1-2 per cent with the Hang Sang and the Korean Kopsi among the big winners.
Shares in Mahindra and Mahindra fell after a Supreme Court ruling banning the registration of certain capacity diesel vehicles in Delhi. The stock was down 3 per cent in early trade.
Tata Motors too dropped following the Supreme Court verdict. Cairn India was the top gainer from the Nifty, jumping 2 per cent, following a rise in crude prices. Wipro was trading marginally lower after the company said that revenues would be affected due to the rains in Chennai.
Banking stocks were once again subdued in trade with ICICI Bank and Axis Bank among the losers. Infosys was up after the company said that Hong Kong's Fubon Bank has selected Finacle as its core banking platform.
Arcotech jumped 5 per cent after reports that the company has bagged order worth Rs 335.37 crore from government.
Markets are expected to remain volatile in the next few trading sessions ahead of the US Fed decision.