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Benchmark indices are trading firm amid strong Asian cues along with banking and capital goods shares leading the gains.
The rupee rallied to a near one-month high on Monday, with stocks and bonds joining in, as hopes for a prolonged easy monetary policy in the US boosted emerging markets.
The rupee today strengthened by 90 paise to trade at four-week high of 62.58 against the dollar.
However, traders said domestic concerns such as inflation and decade-low economic growth were likely to cap extended gains.
The Wholesale Price Index Inflation data schedule later today will be the trigger for our markets in terms of determining the policy stance of the central bank on September 20 mid-quarter review.
By 10:30, the Sensex was higher by 230 points at 19,972 levels and the Nifty surged 68 points at 5,919 levels.
On the global front, the U.S. dollar slid while bonds and shares rallied in Asia on Monday after news Lawrence Summers had dropped from the race to head the Federal Reserve promised to prolong the lifetime of super-easy money.
Further whetting risk appetite was signs of progress on Syria, all of which helped Australian shares to a five-year peak and South Korea to a six-month high.
HSBC downgrades Indian shares to "underweight" from "neutral", citing the recent rally and downside risks to growth.
The bank says that after the recent bounce, India looks relatively expensive and is most exposed to growth adjustments.
On the sectoral front, BSE Bankex has surged by over 3% followed by counters like Capital Gods, Auto, PSU, Realty, Power and FMCG, all gaining by 2% each. However, BSE IT index has declined by over 2%.
The main gainers on the Sensex at this hour include ICICI Bank, Maruti Suzuki, ONGC, Hero Moto, L&T, M&M, HUL and NTPC, all gaining between 2-4.5%.
On the losing side, Wipro, TCs and Infosys have declined between 1-2%.
Among other shares, First Leasing Company of India is locked in lower circuit of 20% at Rs 26.80, also its 52-week low on BSE, after the Reserve Bank of India (RBI) has barred the finance company from doing any business until further orders following inspection of its books and records as on March 31, 2013.
JSW Steel is trading higher by nearly 4% at Rs 657 after the company said crude steel production in August increased by 29% year on year at 985,000 tonne over the previous year.
The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices are up nearly 1% each.
The market breadth in BSE remains positive with 1,088 shares advancing and 495 shares declining.
