Asian markets were trading higher led by gains in the Hong Kong's Hang Sang and the Korean Kospi, with Indian markets taking cues from strong openings in the region.
The Bank of England cut interest rates by 0.25 per cent to a record low, which boosted sentiments.
The Sensex was trading with gains of 241 points, while the Nifty rallied 70 points in early trade at 8,621 points.
In fact, ICICI Bank which has seen relentless selling pressure following a poor set of quarterly numbers, saw some respite with smart gains and was leading Nifty gainers.
Union Bank of India and Andhra Bank were trading higher ahead of results to be declared later on Saturday.
Bharti Airtel was the only Nifty stock that was trading with losses. Shares in ONGC gained ground following a rally in crude prices. Oil exploration companies tend to benefit from a drop in crude prices.
Midcap stocks saw good buying interest with Arvind leading the gainers there along with Page Industries.
Meanwhile, the rupee was last seen trading at 66.86 to the US dollar.