However, a steep fall in the shares of IT major Infosys limited the rise in the Sensex.
The 30-share barometer rose by 40.62 points, or 0.19 per cent, to 21,896.84 with stocks of oil & gas, banking, auto and FMCG sectors leading the gains. The index had gained 29.80 points in the previous session.
On similar lines, the National Stock Exchange index Nifty moved up by 11.75 points, or 0.18 per cent, to 6,528.65.
Brokers said buying activity picked up following encouraging economic numbers as retail inflation slowed to a 25-month low of 8.10 per cent in February and industrial production recorded a 0.1 per cent growth in January after contracting for three months in a row.
Besides, a firming trend in other Asian markets also supported the upside trend on the domestic bourses, they said.
Bucking the trend, stocks of IT major Infosys tumbled 7.61 per cent to Rs 3,391.55 as company expects sluggish growth in the January-March quarter.
Among other Asian markets, Hong Kong’s Hang Seng rose by 0.49 per cent while Japan’s Nikkei gained 0.47 per cent in early trade today.