The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks yesterday.
The BSE-30 share index, Sensex, resumed higher at 21,114.49 and hardened further to 21,217.12 before quoting at 21,201.16 points at 1030 hours.
It showed a gain of 126.57 points or 0.60 per cent from its last close.
The NSE 50-share Nifty also firmed up by 34.65 points or 0.55 per cent to 6,313.55 at 1030 hours.
Asian stocks rose in early trade, as improved economic data sent US stocks surging overnight.
Key benchmark indices in China, Hong Kong, Taiwan, South Korea and Singapore were up 0.14 to 0.84 per cent, while Japan's Nikkei Average fell 0.32 per cent.
US stocks extended all-time highs yesterday as a drop in jobless claims fuelled optimism in the economy.
Foreign institutional investors (FIIs) bought shares worth a net Rs 743.70 crore yesterday, as per provisional data from the stock exchanges.
