The S&P BSE benchmark Sensex snapped its five-day losing streak and recovered 61 points in the late morning trade on fresh buying in banking, capital goods, realty and power sectors following overnight gains in the US market.
Bank stocks gained after the RBI yesterday laid out a road map to deal with a surge in bad loans in the banking system.
The 30-share Sensex resumed higher at 20,544.64 and hovered in a range of 20,572.32 and 20,478.54 before quoting at 20,562.33 at 1030 hrs, showing a gain of 64.08 points, or 0.31 per cent, from its last close.
The NSE's benchmark index, the 50-share Nifty, also moved up by 21.65 points, or 0.36 per cent, to 6,095.35 at 1030 hrs.
Major gainers in early trade were Mahindra and Mahindra 2.96 pct, Tata Steel 2.37 pct, Tata Consultancy Services (TCS) 2.05 pct, Sesa Sterlite 1.52 pct, L&T 1.20 pct, Bharti Airtel 1.13 pct and SBI 1.10 pct.
US stocks rebounded yesterday as investors welcomed data showing a robust pace of growth in the world's largest economy in the final quarter of last year, while upbeat earnings from Facebook Inc boosted the tech sector.
In Asia, the Japanese Nikkei 225 index fell 0.49 pct. China's markets are closed till February 7 for the Lunar New Year holiday, while Hong Kong bourse is shut until February 4.
Among other bourses shut for holiday are those of Taiwan, South Korea, Indonesia, Malaysia and Vietnam.
Meanwhile, foreign institutional investors (FIIs) sold shares worth a net Rs 430.20 crore yesterday, as per provisional data from the stock exchanges.