Markets continued to trade in late-afternoon trades led by buying in index heavy-weights such as Reliance Industries, ICICI Bank, among others.
Risk appetite was strong on optimism of further monetary policy by Japanese central bank to support flagging growth in the world's third-biggest economy.
Japan’s new Prime Minister Shinzo Abe, whose Liberal Democratic Party won a landslide victory in the December 16 election, is scheduled to appoint a cabinet today after the lower house names him premier. The new government has promised economic policies to boost growth.
Meanwhile, hopes of quick resolution to US 'fiscal-cliff' issue after President Barack Obama cut short his Christmas holidays, boosted risk appetite.
At 2:20PM, the Bombay Stock Exchange's Sensex index rose 206 points and traded at 19,463.47 while the National Stock Exchange's Nifty-50 index gained 59 points at 5,915.95.
Asian markets also traded with a positive bias. China's Shanghai Composite rose 0.25% to 2,219, Singapore's Straits Times rose 0.4% to 3,182 while Japan's Nikkei gained 1.5% to 10,230. Financial markets in Hong Kong and Australia are closed on Wednesday for public holiday.
The MSCI Asia Pacific index outside Japan rose 0.02% to 891.50.
Most of the European markets including France, UK, Greece, Italy are shut today for Christmas holidays.
Back home,.consumer goods, pharmaceuticals, metal, real-estate, banks indexes lead the gain while IT declined on BSE.
Among key Sensex stocks, Bharti Airtel gained 3%, Sterlite Industries and Jindal Steel gained nearly 2% while Hindalco Industries rose 1% in metal space. Among banks, SBI and ICICI rose nearly 2%. while among autos, Bajaj Auto gained 2% and Mahindra & Mahindra rose 1%.
On the other hand, Tata Motors and Hero MotoCorp fell 0.6% and 0.3% while TCS, Infosys declined 0.1% on BSE.
Reliance Industries, the owner of world's biggest refining complex in Gujarat, surged 1.4% on reports that a panel appointed by the government had recommended a pricing formula that could sharply raise the prices of natural gas.
The other notable movers include, Credit Analysis and Research Limited (CARE) which is trading at Rs 925, a 23% premium against its issue price of Rs 750 per share in the late bidding on the National Stock Exchange (NSE).
Binani Industries has surged 9% to Rs 142.50 in opening deals after its Board gave an in-principle approval to divest its holding in subsidiary firm Binani Cement by up to 40%.
Essar Ports is trading higher by 3% at Rs 97.30, extending its Monday’s over 2% gain after the company announced the commissioning of its 16 million metric tonnes per annum (MMTPA) dry bulk terminal at Paradip in Odisha, taking the aggregate handling capacity of the company to 104 MMTPA.
Glenmark Pharmaceuticals rallied over 5% to Rs 547, its highest level since September 2008 on back of heavy volumes on the NSE. The stock opened at Rs 522 and has seen a combined 1.28 million shares changing hands on the counter so far compared to less than one million shares that were traded daily in past two weeks.
Suzlon Energy has dipped over 3% at Rs 17.30 in an otherwise firm market after the company said that its promoters have sold part of their stake to raise around Rs 63 crore for corporate debt restructuring (CDR) process.
The BSE mid-cap and small-cap gained nearly 1%.
The overall breadth is strong as 1,517 stocks advanced while 1,227 stocks declined on the BSE.