extended gains led by index heavyweights HDFC and ITC while capital goods shares rallied on encouraging April IIP data.
At 1:50PM, the 30-share Sensex was up 256 points at 26,682 and the 50-share Nifty was up 61 points at 8,044.
(Updated at 1:20PM)
continued to trade firm despite weakness in the European peers as the negotiations on ending a deadlock between Greece and its international creditors failed.
The rally was aided by capital goods, healthcare, oil & gas and auto shares.
Also, investors remain cautious ahead of the FOMC meet which is a key economic event and is likely to decide the timeframe for the Fed rate hike.
Banking shares are losing sheen as caution prevailed on the bourses on worries about the softness in the inflation numbers being short-lived thus anticipating that the RBI may refrain from further easing of the monetary policy.
By 1:20 PM, the Sensex was higher by 218 points at 26,643 and the Nifty gained 48 points at 8,031.
KEY MACROECONOMIC DATA
Meanwhile, the wholesale price index (WPI) contracted to 2.36% in May versus -2.65% in the previous month on the back of dropping oil and manufacturing goods prices.
Index of Industrial Production (IIP) increased by 4.1% in April, against a growth of 2.8% a year ago and 2.5% in March this year on the back of 5.1% growth in manufacturing and 11.1% expansion in capital goods. The manufacturing sector contributes 75% to the index.
Consumer Price Index (CPI) rose from 4.87% in April to 5.01 in May on the back a poor monsoon.
The rupee is trading below 64.08 on sustained dollar demand from importers and on the back of euro's weakness against the dollar after negotiations between Greece and its creditors failed.
On the sectoral front, BSE Healthcare, Auto, Oil & Gas, Realty indices are trading higher up to 1.5%. However, BSE Bankex is trading lower by 0.4%.
Mahindra & Mahindra is set to launch a new light commercial vehicle named Jeeto by the end of this month to take on homegrown rival Tata's popular minitruck Ace Zip. The stock is up 2%.
The Tripura unit of ONGC has introduced highly technical Hydro-fracturing (HF) job procedure to intensify exploration of natural gas for supply in different projects of the state.The stock is trading higher by 1%.
Shares of Relinace Industries continue its Friday’s rally and are trading higher over 1% after Mukesh Ambani in the 41st AGM said that RIL will commence launch Reliance Jio in December and will cover the entire population in a span of three years. He added that Reliance has made an investment worth Rs 1 trllion last year and plans to expand his retail business.
Tata Motors is trading with marginal gains after after reporting data on global wholesale volumes for May 2015. Tata Motors' group global wholesales, including Jaguar Land Rover, rose 2.15% to Rs 79,244 units in May 2015 over May 2014.
Shares of capital goods companies are trading higher on the back of upbeat IIP numbers. Larsen and Toubro (L&T), Bharat Heavy Electricals Limited (BHEL), ABB India, Thermax, Alstom T&D India, Alstom India and Siemens are up between 1-2% on the BSE.
Vedanta on Sunday said it would merge its subsidiary Cairn India with itself for a larger natural resource play. Each Cairn India shareholder would be offered an equity share of Vedanta , besides a 7.5% redeemable preference share of Rs 10 face value. Vedanta has slipped nearly 1% while Cairn India has moved up by 4%.
Public-sector banks have put Rs 14,000 crore worth of non-performing assets (NPAs) up for sale, to ease some pressure exerted by stressed loans on their balance sheets. Among public sector banks, SBI, Punjab National Bank, Bank of India, Punjab & Sind Bank are trading lower up to 2%.
Shares of Infosys and TCS continue to remain under pressure US government opened an investigation against two of the Indian IT outsourcing companies for possible violations of H1-B visa rules. TCS is down 0.5% while Infosys is trading with marginal losses.
In the broader market, BSE Midcap and Smallcap indices are trading higher by 0.5% and 0.6% each.