he benchmark BSE Sensex is up 0.7 percent, while the broader Nifty is up 0.6 percent, heading towards their third consecutive day of gains.
Larsen & Toubro Ltd gains 2 per cent after Barclays upgrades the stock to "overweight", citing a potential recovery in earnings and valuations. Sesa Goa Ltd gains 8.7 per cent ahead of its inclusion in the BSE Sensex on Tuesday. Hexaware Technologies Ltd gains 6.63 per cent after Baring Private Equity Asia agreed to buy a controlling stake in the Indian outsourcing service provider for about $420 million.
Shares of consumer durable, power, metal, IT, healthcare and realty sectors were in good demand.
The BSE-30 share barometer Sensex resumed higher at 18,602.56 and moved up further to a high of 18,728.19 before quoting 18,701.18 points at 1030 hours.
It showed a gain of 181.74 points or 0.98 per cent from its last last weekend's level.
The NSE 50-share index, Nifty, also rose by 47.40 points or 0.87 per cent to 5,519.15 at 1030 hours.
Major gainers were - BHEL (4.39 per cent), Sterlite Ind (4.22 per cent), Tata Power (4.04 per cent), Wipro (3.19 per cent), Coal India (2.78 per cent) and NTPC (2.33 per cent).
The market may remain volatile this week ahead of the expiry of futures & options (F&O) August contract on coming Thursday.
Asian stocks rose for a second day in their early trade after a slump in US home sales eased speculation that the Federal Reserve will reduce economic stimulus next month.
Key indices in Singapore, Hong Kong, China, Japan, Taiwan and South Korea were up by 0.14 to 1.41 per cent.