The Bombay Stock Exchange benchmark index, Sensex, rose over 131 points in opening trade on Wednesday, rising for the second straight session on higher capital inflows by foreign funds and a firming global market.
Short-covering by speculators too supported the rise in stock prices.
The 30-share index, which had surged 453.38 points in the previous session, gathered another 131.21 points at 13,984.91 points in opening trade.
Similarly, the wide-based National Stock Exchange index Nifty moved up by 44.55 points to 4,155.95.
Stock brokers said pick up in buying by foreign funds, triggered by firming global equity markets after better than expected results from US companies Goldman Sachs and Intel, lifted hopes for a economic recovery.
Major gainers were Reliance Industries by 0.82 per cent to Rs 1,826, Reliance Infra by 2.48 per cent to Rs 1,080, RCom by 2.49 per cent to Rs 255.20, Larsen and Toubro by 1.70 per cent to Rs 1,396, Tata Steel by 2.44 per cent to Rs 366.95 and Sterlite Industries by 2.91 per cent to Rs 621.50.
The US Dow Jones Industrial Average ended 0.33 per cent higher on Tuesday, while Hong Kong's Hang Seng was up 1.38 per cent and Japan's Nikkei gained 0.72 per cent in morning trade on Wednesday.