The benchmark BSE Sensex gained over 64 points in opening trade on Wednesday as investors built up positions ahead of the Union budget, which is slated to be unveiled later in the day.
The rupee appreciating 24 paise to 67.63 against the dollar added to the positivity.
The 30-share BSE index, which had lost 226.50 points in the previous two sessions, recovered 64.15 points, or 0.23 per cent, to 27,720.11.
Similarly, the NSE Nifty moved up 21.90 points, or 0.26 per cent, to 8,583.20.
Fresh positions created by retail and domestic institutional investors on hopes of an investor-friendly budget lifted sentiment.
Realty, PSU, oil and gas, capital goods, consumer durables and banking stocks were lapped up, accounting for much of the gains.
In Asian trade, Hong Kong's Hang Seng was down 0.93 per cent while Japan's Nikkei edged higher by 0.25 per cent in early trade on Tuesday.