The two key indices gained over half a per cent each, as healthy buying was witnessed in banking, consumer durables and automobile stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged higher by 56.90 points or 0.70 per cent to 8,199.05 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,441.02 points, traded at 26,561.35 points (2.15 p.m.) -- up 167.34 points or 0.63 per cent from the previous close at 26,394.01 points.
The Sensex has touched a high of 26,577.75 points and a low of 26,395.50 points during the intra-day trade so far.
The BSE market breadth was skewed in favour of the bulls -- with 1,643 advances and 818 declines.
"Rupee appreciation, as well as broadly positive global markets and value buying at lower levels lifted the Indian equity markets," Astha Jain, Senior Research Analyst at Hem Securities, told IANS.
"However, some cautiousness on account of the upcoming domestic macro-economic data points such as GDP, fiscal deficit and eight core industrial (ECI) was also witnessed."
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded firm due to short covering and buying support.
"Banking stocks traded firm, while pharma stocks traded with mix sentiments. Auto, oil-gas, textile, FMCG, cement and power stocks traded with firm sentiments due to buying support," Desai said.
"Bearish USD/INR futures prices supported recovery in Nifty, however, selling pressure at higher levels is expected to bring-in volatility during the second half of the session."