The benchmark BSE Sensex rallied gained around 65 points in early trade on Tuesday owing to sustained buying by funds and retail investors amid firm Asian cues.
Moreover, covering-up of short positions by speculators in view of approaching monthly expiry in the derivatives segment on Thursday contributed to the rally.
Rising for the fourth straight session, the BSE 30-share barometer gained 64.52 points, or 0.22 per cent, to 28,726.10.
The gauge had gained 506.02 points in the previous three sessions.
All sectoral indices, led by metal, IT and power, were in the green, gaining up to 2.04 per cent.
Also, the NSE Nifty surged 17.95 points, or 0.22 per cent, to 8,897.15.
Brokers said that a pick-up in buying activity coupled with covering-up of short position by speculators in the face of February month's expiry in the derivatives segment on Thursday had a positive impact too.
Firming trend at other Asian markets was another factor behind today's rally on the domestic bourses here.
In other Asian markets, Japan's Nikkei was up 0.46 per cent while Hong Kong's Hang Seng rose 0.04 per cent in early trade today. Shanghai Composite Index edged higher by 0.15 per cent.
The US markets remained closed yesterday for a public holiday.