The key benchmark indices were trading higher in early deals after yesterday’s sharp sell-off. The Sensex surged 191 points to 14,234. The Nifty also rose 59 points to 4,225.

In yesterday’s trade, Indian stocks were hammered as investors expressed disappointment after Pranab Mukherjee presented an expansionary budget that did not outline any major reforms.

Banking, realty and capital goods stocks gained in early trade today. The BSE capital goods index rose 2 per cent and the BSE banking index was up 1.7 per cent. The BSE realty index gained 1.4 per cent. 

“The markets are likely to correct further. Investors should avoid investment calls in the near term,” said Pankaj Pandey, Head (Research), ICICI Securities.

In the Sesnex pack, ITC was the biggest gainer. The stock rose 4.4 per cent. Reliance Infra, L&T and JP Associates were the top gainers in the pack.

In the US markets, stocks ended mostly lower on Monday as drop in oil and commodities prices had investors worrying again that demand for basic materials may remain slack.

The Dow Jones industrial average rose 44.13, or 0.5 percent, to 8,324.87, and the broader Standard & Poor's 500 index rose 2.30, or 0.3 percent, to 898.72. The technology-heavy Nasdaq composite index fell 9.12, or 0.5 percent, to 1,787.40.

In Asia, Japan's Nikkei 225 stock average fell 132 points. Hong Kong's Hang Seng and South Koreas’ s Kospi, however, were trading in the positive turf.