Equity benchmark indices traded one per cent higher during early hours on Monday on positive global cues and steady flow of foreign institutional investor (FII) funds.
At 10:15 am, the BSE S&P Sensex up by 339 points or 0.86 per cent at 39,806 while the Nifty 50 gained by 99 points or 0.85 per cent at 11,746.
Most sectoral indices at the National Stock Exchange were in the green with Nifty PSU bank gaining by 1.5 per cent, private bank by 1.4 per cent and IT 1.1 per cent. But Nifty pharma dipped by 0.5 per cent.
Among stocks, Future Retail rose by 20 per cent to Rs 162.30 per share after Mukesh Ambani-led Reliance Industries (RIL) said it will acquire the company's retail, wholesale, logistics and warehousing business for Rs 24,713 crore.
Adani Ports ticked up by 4.2 per cent, Bharti Infratel by 4 per cent and Tata Motors by 3.4 per cent. HDFC Bank and Axis Bank rose by 2.1 per cent and 1.9 per cent respectively while Bajaj Finserv gained by 1.6 per cent.
However, JSW Steel, Bharti Airtel, Sun Pharma and Cipla suffered losses. Auto stocks like Eicher Motors, Bajaj Auto, Maruti and Hero MotoCorp too traded with a negative bias.
Meanwhile, Asian shares were on a 29-month high as investors were upbeat reading on China's service sector data. MSCI's broadest index of Asia Pacific shares outside Japan rose by 0.5 per cent.
Chinese blue chips firmed by 0.7 per cent after surveys showed Chinese services jumping a full point to 55.2 in a hopeful sign of reviving consumer demand.
Tokyo's Nikkei rallied by 1.9 per cent aided by news Warren Buffett's Berkshire Hathaway had bought more than 5 per cent stakes in each of the five leading Japanese trading companies.