At 2:20 pm, the S&P BSE Sensex was trading at 27,333, up 216 points, while the broader Nifty50 was ruling at 8,459, up 68 points.
In the broader market, BSE Midcap and BSE Smallcap indices mirrored the gains in headline indices and rose 0.5% each.
The Supreme Court on Monday rejected a petition to delay the annual federal budget, which Finance Minister Arun Jaitley is scheduled to deliver on Feb. 1, dismissing concerns about potential giveaways ahead of critical state polls.
Analysts are hoping for a budget that delivers some incentives to support an economy that has been hit by India's shock move to ban higher-value banknotes.
Gains were capped by Trump formally withdrawing US from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies, as China's influence in the region rises.
IT stocks fell 0.5%, with Infosys Ltd and HCL Technologies Ltd down over 1% each amid worries U.S. President Donald Trump's protectionist stance would adversely impact global exporters.
Banks were among the gainers, with HDFC Bank up over 1% after upbeat Q3 earnings results. India’s third-biggest lender reported a 15% rise in third-quarter net profit at Rs 3,865.33 crore due to higher interest and fee income. Its profit for was Rs 3,356.84 for the corresponding quarter last year.
All three listed oil marketing companies (OMCs) Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) along with IndusInd Bank, Hindustan Zinc and Power Grid Corporation are 10 stocks from the Nifty500 index hitting their respective record highs on the National Stock Exchange (NSE).
Among individual stocks, Tata Communications has rallied 6% to Rs 712, also its 9-year high on the BSE in intra-day trade, after the company reported an over 12-fold jump in its consolidated net profit of Rs 1,413 crore for the December end quarter (Q3FY17), mainly on account of one-time gain due to sale of its data centres. Tata Group Company had profit of Rs 111 crore in the same quarter last fiscal.
Ajanta Pharma was trading 4% lower at Rs 1,713, recovering 12% from its intra-day’s low on the BSE after the company clarified that there is no import alert by the US Food and Drug Administration (FDA) and the company continue to supply to US market.
The stock of pharmaceutical company hit an intra-day low of Rs 1,527, tanked 15% from its early morning high of Rs 1,804 on the BSE after the media reports suggested that Ajanta Pharma has received import alert from USFDA for its Paithan unit at Aurangabad.
MOIL was down 4% to Rs 367 on the BSE in early morning trade after the government started to sell its 10% stake in the mining company through offer for sale (OFS).