The Sensex was up around 100 points, hitting a fresh high of 32,128.Nifty also rose to new high of 9,920.Among IT stocks, Infosys, Tech Mahindra and Wipro rose 1-2 per cent. Gains in banking stocks such as Kotak Mahindra Bank (+1%) and ICICI Bank (1%) also supported the upmove. Market heavyweight Reliance Industries (+1%) was also in the limelight.
ITC (down around 2 per cent) was among the top Nifty50 losers.
In Asian markets, Chinese blue-chips recouped steep early losses after data showed the world's second-largest economy grew at a slightly faster than expected pace of 6.9 per cent in the second quarter, thanks to robust industrial output, retail sales and exports.
MSCI's broadest index of Asia-Pacific shares outside Japan extended earlier gains to climb 0.4 per cent after the buoyant China readings. Japanese markets were closed for a holiday.
Asian markets also rode the updraft from a strong Wall Street performance on Friday.
The Dow and S&P 500 hit record highs after data showed consumer prices were unchanged in June and retail sales fell for a second straight month, pointing to tame inflation and subdued expectations of strong economic growth in the second quarter which could make Fed policymakers more cautious.
The chances of a Fed rate hike in December fell to 43.1 percent after the data came out from 55 percent late on Thursday, according to the CME Group's Fedwatch tool. (With Reuters Inputs)