The BSE Sensex rose 0.7 percent on Friday and was on track to post its fourth weekly gain in a row, on expectations improving global risk appetite will draw in more portfolio investments.
Foreign funds have moved more than $1.5 billion into beaten-down Indian shares this month, in sharp contrast to net outflows of about $500 million in 2011, and the outlook appears bright with the central bank indicating it will support growth.
By 10:28 a.m. (0458 GMT), the main 30-share BSE index was up 0.73 percent at 17,201.79 points, rising for the sixth consecutive session. Two thirds of its components rose.
The benchmark, which was one of the world's worst performers dropping a quarter last year, has gained more than 11 percent this month.
Positive sentiment stemming from the government's moves like allowing foreign retail investors to trade in local equities and a shift in the central bank's monetary policy stance are attracting foreign funds, said Deven Choksey, chief executive officer and managing director of K R Choksey Shares & Securities.
Energy major Reliance Industries (RELI.NS), which contributes about a tenth to the benchmark index, rose more than 2 percent to 806.35 rupees, ahead of up to $2.1 billion buyback that opens on February 1.
Infosys Ltd (INFY.NS), the No.2 Indian software exporter, climbed 1.2 percent and larger rival Tata Consultancy Services (TCS.NS) gained 1.6 percent.
Indian Hotels Co Ltd (IHTL.NS), which owns Mumbai's Taj Mahal Hotel and is part of the Tata conglomerate, fell 1.7 percent after it reported flat quarterly earnings growth.
NTPC Ltd (NTPC.NS), the country's No. 1 power utility, rose 1.2 percent ahead of its quarterly results due later in the day. The company has been battling shortage of fuel and muted ability of distribution firms to buy electricity.
The 50-share NSE index was up 0.64 percent at 5,191.45. In the broader market, there were more than 3 gainers for every loser, with 219.1 million shares changing hands.
Elsewhere in Asia, shares paused as investors sought to gauge how sustainable the burst of a Fed-inspired optimism will be while waiting for the outcome of crucial Greek debt talks.
At 0504 GMT, the MSCI's measure of Asian markets other than Japan was up 0.05 percent, while Japan's Nikkei was down 0.24 percent. South Korea's Kospi rose 0.11 percent.
STOCKS ON THE MOVE
* Bharat Earth Movers Ltd (BEML.NS) dropped 2.5 percent after the heavy equipment maker said its net profit dropped by more than a fifth in the December quarter.
* Alstom Projects India Ltd (ABBP.NS) fell 2.4 percent after it posted a net loss in the December quarter, which included a mark-to-market loss of 394.8 million rupees on foreign exchange derivatives contracts.
MAIN TOP THREE BY VOLUME
* GVK Power and Infrastructure (GVKP.NS) on 5.7 million shares
* Suzlon (SUZL.NS) on 5.6 million shares
* Shree Renuka Sugars (SRES.NS) on 3.9 million shares