The BSE Sensex opened higher while the Nifty50 started the day above the 9,600-mark tracking positive global cues.
The Nifty50 managed to hold above the 9,600-level on the back of strong buying activity seen on Monday.
"The stock specific optimism was very much in line with expectations and looking at the momentum, we expect this resistance to shift a bit higher i.e. 9630 - 9650," said an Angel Broking report.
At 9.35 am, the BSE Sensex was trading at 31,254.99, up 33.37 points while the Nifty50 was ruling at 9,629.30, up 14.30 points.
Reliance Industries Ltd (RIL) led gains on the Sensex at 1.73 per cent, followed by Adani Ports and NTPC.
HeroMoto Corp and Wipro were among the laggards in the early morning trade.
Manufacturing growth numbers fall
The manufacturing sector eased to a four-month low in June amid a slowdown in output and new orders as softer domestic consumption partly offset strong foreign demand, reported Reuters.
The Nikkei India Manufacturing Purchasing Managers' Index, compiled by IHS Markit, fell to 50.9 in June from 51.6 in May.
The Indian benchmark indices gained over 1 per cent in trade yesterday in reaction to the Goods and Services Tax (GST) roll-out.
The BSE Sensex closed at 31,221.62, up 300 points led by tobacco major ITC on the back of lower taxes on tobacco that would boost the company's business. ITC contributed 208-points to yesterday's rally and has gained over 42 per cent in this year alone, becoming the highest weight in the index.
Following ITC, Hero MotoCorp and Maruti Suzuki gained 2 per cent each becoming the second-biggest gainers after they announced price cuts on models where the tax rates had been lowered.
The BSE Fast Moving Consumer Goods (FMCG) Index gained 3.4 per cent touching an all-time high. Invetsors rushed to these stocks as GST rates on FMCG goods figured in the lower bracket.
All BSE sectoral indices closed the day with gains after heavy buying streak driven by domestic investors.