Extending gains for the third straight session, the BSE benchmark Sensex surged by nearly 172 points in early trade on Tuesday on sustained buying by funds and retail investors.
The 30-share baraometer, which had gained over 442 points in the previous two sessions, rose by 172.30 points, or 0.97%, at 17,759.97.
All sectoral indices, led by metals and realty, were trading in the positive zone with gains of up to 1.46%.
The wide-based National Stock Exchange Nifty index moved up by 53.20 points, or 0.97%, to 5,412.75.
Brokers said continued buying by funds as well as retail investors on expectations of improvement in the liquidity in the financial system following a cut in the Cash Reserve Ratio by RBI, and higher industrial production in January buoyed the trading sentiment.
A firm trend in Asian markets also influenced the trading sentiment, they added.
Meanwhile, Hong Kong's Hang Seng Index rose by 1.09%, while Japan's Nikkei index was up by 1.10% in morning trade.
The US Dow Jones Industrial Average gained 0.29% in Monday's trade.