Positive strides marked the morning hours of trade, as the Sensex gained 244 points at 17,972, while the Nifty moved up 84 points at 5,310.
The easing of the civil unrest at Egypt, along with the impending Budget, seemed to have sobered the negative market sentiment prevalent for the most part of last week.
On the BSE, auto stocks rallied since the commencement of trading, and the index was up 3.2% at 8,758.
Tata Motors, whose ADR gained a whopping 9% on Friday after the company reported a 3.5 times increase in its Q3FY11 numbers, led the auto stocks at Rs 1,217 up 6.3%.
Apollo Tyres at Rs 53 up 4% and Amtek Auto at Rs 117 up 3% were amongst the top gainers.
Capital Goods stocks saw heavy buying, thus pushing the index up 3% at 13,017. Realty stocks were also in favour, and the index gained 2.3% at 2,148.
The Oil & Gas index slipped marginally at 9,204; losing stocks were Reliance Industries at Rs 901 down 1% on reports the Mukesh-Ambani led company may face hefty fines related to a long-standing insider trading case. ONGC was down marginally at Rs 277.
The broader markets outperformed the benchmark, with the BSE Mid-cap at 6,625 up 2.3% and the Small-cap at 8,050 up 3%.
With 2,005 advancing stocks and 362 declines, the market breadth was very positive.