The BSE 30-stock Sensex hit 10-1/2-week high and the 50- scrip Nifty scaled the highest level in over 10 weeks.
Sensex resumed trading higher at 17,457.95 and moved up further to 17,526.82 before quoting at 17,492.95 at 1030hrs -- a gain of 93.97 points or 0.54 per cent from the last close.
The NSE Nifty also moved up, gaining 27.90 points or 0.53 per cent to 5,306.50 at 1030hrs.
Meanwhile, foreign institutional investors (FIIs) bought shares worth Rs 591.06 crore yesterday, as per provisional data from the stock exchanges.
Major gainers were Bharti Airtel (3.79 pc), Gail India (1.98 pc), ICICI (1.72 pc), Dr Reddy's (1.47 pc), Maruti Suzuki (1.21 pc) and ONGC (1.17 pc).
Asian stocks rose for the fifth day early today on hopes that central banks in the US and Europe may ease monetary policy to spur economic growth.
Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan rose by up to 1.55 per cent.