The equity benchmark indices began trade on an optimistic note on Tuesday, extending the previous day's rally, amid a firm trend in global markets.
The 30-share BSE Sensex climbed 92.83 points to 65,308.92 in early trade. The NSE Nifty gained 35.5 points to 19,429.10.
From the Sensex pack, NTPC, Mahindra & Mahindra, ITC, Tata Motors, Axis Bank, Bajaj Finserv, JSW Steel and Larsen & Toubro were the major gainers.
Jio Financial Services, Tata Consultancy Services, Infosys and Titan were the laggards.
Shares of Jio Financial Services, the demerged financial services unit of Reliance Industries, listed on the bourses on Monday.
With the company's listing, the BSE Sensex and the NSE Nifty added Jio Financial Services to their pack. This has been done to ensure price stability and limit volatility in shares of RIL in view of the demerger, as part of the revised methodology of the exchanges to treat demergers.
Also read: Jio Financial slides 5 per cent again as index funds sell-off continues
The newly listed entity would be removed from the indices at the end of the third day of its listing.
In Asian markets, Seoul, Tokyo and Hong Kong were quoting in the green, while Shanghai traded lower.
The US markets ended mostly in positive territory on Monday. "There are two dominant factors influencing the equity markets now. One, the resilient US economy supports global growth and global equity markets; this is a positive. Two, the sharp spike in US bond yields (the 10-year yield at 4.34 per cent is the highest since 2007) impacts capital flows to emerging markets like India; this is a negative for Indian markets.
"A sustained rise in FII inflows will happen only if US bond yields decline. Clarity on this will emerge only after trends in US inflation and the Fed's monetary stance indicate softening," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The global oil benchmark Brent crude declined 0.14 per cent to $84.34 a barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,901.10 crore on Monday, according to exchange data.
The BSE benchmark had climbed 267.43 points or 0.41 per cent to settle at 65,216.09 on Monday. The Nifty gained 83.45 points or 0.43 per cent to end at 19,393.60.