Nickel futures rose by Rs 12.60, or 1.25 per cent, to Rs 1,018.90 per kg, as speculators created positions, driven by firming trend overseas.
Strong demand for metal from alloy-makers at physical markets also supported the upside in nickel futures prices.
At the Multi Commodity Exchange platform, nickel for delivery in September contract traded Rs 12.60, or 1.25 per cent higher, at Rs 1,018.90 per kg, with a turnover of 1,469 lots.
The metal for delivery in August contract also traded higher by Rs 12.30, or 1.23 per cent, to Rs 1,011.30 per kg, clocked a turnover of 12,232 lots.
At the London Metal Exchange, nickel traded 1.7 per cent higher to $21,639 per tonne in early trade today.
Analysts attributed the gains in nickel futures to a firming trend in copper and other base metals as weak dollar raised the appeal of raw materials priced in the US currency.
Besides, strong demand at the physical markets also influenced the nickel futures here, they said.