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Markets extended gains with the benchmark indices gaining over 1.6% each in morning deals.
The gains were on the back of an uptick in IT majors TCS and Infosys along with banks like ICICI Bank and HDFC Bank.
At 1030 hrs, the Sensex was up 284 points at 18,518 and the Nifty edged higher by 87 points to trade at 5,428.
Broader markets too stepped up with the mid and smallcap indices gaining 0.6-0.8%.
Also, Rupee recovered from day's low and was quoting at 67.71 to a Dollar.
On the macro front, after contracting for the first time in 20 months in July, the growth in the services sector, which occupies the largest segment in the Indian economy, fell further in August, according to the widely-tracked HSBC Purchasing Managers' Index for Services.
The services PMI contracted to 47.6 points in August from 47.9 points in July, indicating more contraction in this sector from the previous month amidst falling volumes of incoming new work and tough economic conditions.
A reading above 50 shows expansion, while below 50 means contraction.
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(Updated at 1040 hrs)
After a momentary tick in the red, the markets gained in the opening trades on account of gains in heavyweight names like Infosys, Reliance Industries, Tata Motors and TCS.
At 0940 hrs, the Sensex was up 223 points at 18,458 and the Nifty gained 66 points to trade at 5,407.
In the broader markets, the mdicap index was up 0.4% and the smallcap index gained 0.2%, both underperforming the BSE benchmark index which gained 0.6%.
Meanwhile, the rupee was trading weak in early trades as dollar demand from importers continue coupled with FIIs exiting from their investments in domestic markets. Besides that with crude oil prices rising on fears about a potential US military strike on Syria, there are concerns that the current account deficit will rise.
At 0930 hrs, the rupee was trading at Rs 68.43 compared with previous close of Rs 67.73 per dollar. The rupee breaching the Rs 68 per dollar mark in early trades has raised concerns that it may touch a new all-time low soon. The rupee had touched an all-time low of Rs 68.85 last week.
In Asia, stocks snapped a four-day winning streak on Wednesday and safe assets like gold consolidated chunky overnight gains after President Barack Obama clinched the backing of two key figures in Congress in his drive for limited U.S. strikes on Syria.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5% after four days of gains. Philippines and Indonesia's stocks led declines in the region.
The Nikkei average retreated from a near three-week high on Wednesday morning, hit by profit-taking after recent big gains, with many investors on the sidelines ahead of key events in coming days.
The benchmark Nikkei shed 0.8% at 13,869 in midmorning trade, after advancing 4.4% the past two sessions.
Back home, barring FMCG and Realty indices, all the other sectoral indices were in the green with gains of atleast 0.3%.
IT, Teck, Metal, Health Care, Consumer Durables and Oil & Gas indices up 1-1.5% were the major sectoral gainers.
The top gainers among the Sensex-30 were Hero MotoCorp, BHEL, Dr Reddys Lab, Tata Motors, Infosys and Reliance Industries, all up 2% each.
Cipla, TCS, Tata Steel, Hindalco, Jindal Steel, Wipro, Bajaj Auto and Tata Power up 1-1.5% were the notable gainers in morning trades.
On the losing side were Maruti Suzuki, NTPC, ITC, HDFC and M&M, down 0.4-0.7%.
The market breadth was positive. 521 stocks advanced while 309 stocks declined on the BSE.
