The key benchmark indices continued to trade higher led by advances in banking and auto stocks. The Sensex was up 111 points at 17,665 levels and the Nifty rose 25 points to 5,277.
The BSE bankex rose 2.2 per cent and the auto index was up 1.5 per cent. Realty and metal stocks, however, slid today.
Among the Sensex counters, HDFC Bank was the top gainer. The stock jumped 4.5 per cent. Hero Honda Motors advanced 3.6 per cent. HDFC and ICICI Bank were up over 2 per cent each.
Tata Steel, Sterlite and Grasim Ind fell over 1 per cent each.
Asian stock markets slipped on Monday as worries about American consumers undermined confidence in the recovery of the world's largest economy.
Most markets were lower by less than 1 percent after a sharp decline on Wall Street Friday. Oil prices extended a losing streak, while the dollar gained against the yen and fell against the euro.