Analysts say that formation of a BJP government in Uttar Pradesh may accelerate economic progress in India's most populous state as greater economic cooperation between the central and state governments will result in faster implementation of central and state projects.
After the Federal Reserve signalled that there will not be pick-up in pace of tightening interest rates going ahead in the US also aided sentiment towards Indian equities and the rupee.
As of 11:20 am, the Sensex was up 2 points at 9,156 and Nifty was at 29,670, up 85 points.
The Indian shares have been on a tear, rallying over 10 per cent since the start of this year on the back of better than expected third quarter earnings by Indian companies, a supportive Union Budget and influx of foreign funds amid a rally in global markets.
Foreign institutional investors bought shares worth Rs 1,360 crore on Thursday while domestic institutional investors were net sellers to the tune of Rs. 88 crore.
Cigarette makers surged on Friday with ITC gaining more than 7 per cent at day's high of Rs. 288 on Friday, a day after the Goods and Services Tax or GST Council approved a proposal to cap cess on demerit goods such as tobacco and cigarettes at 290 per cent or Rs. 4,170 per 1,000 cigarette sticks. Other cigarette manufacturers VST Industries, Godfrey Phillips and Golden Tobacco also rose with gains of around 5 per cent. ITC was the top gainer on the Nifty in morning deals, helping the index peek above its important crucial psychological level of 9,200.
Lupin, HCL Technologies, Maruti Suzuki and HDFC Bank were also among the notable gainers.
On the other hand, Idea Cellular, Bharti Airtel, Larsen & Toubro, ICICI Bank, Aurobindo Pharma, Hindalco, Tata Motors and State Bank of India were among the laggards.
The broader markets also fell prey to profit-booking as mid-cap and small-cap indices were trading with a negative bias.