The rupee also gained against the dollar tracking losses in the greenback versus the euro and some other Asian currencies. Traders expect 54.25 levels to be tested during the day with the pair likely to break below 54 if FDI in retail gets parliament nod.
At 10.11 a.m., the Sensex traded 73 points or 0.4 per cent higher at 19,421 while the Nifty traded 17 points higher at 5,906.
Independent analyst Sarvendra Srivastava said some volatility around 5,900 levels can be expected because it is an event day in an allusion to the FDI vote in Parliament.
"5,850 is an immediate support while 5,950 is the key upside pivot point for now," he added.
Indian equities have seen sharp gains in December mainly on account of strong liquidity and most analysts have turned positive in their outlook despite weak macro-economic data.
Retail stocks traded with strong gains. Pantaloon Retail traded 1 per cent higher at Rs 232.80 while Shoppers Stop gained nearly 1 per cent. Smaller stocks like Koutons traded with over 4 per cent gains.
IT stocks were down in early trade, but most other group of stocks traded higher, led by high beta realty and metal stocks.
On the Nifty, 39 of the 50 stocks traded higher. Mining major Sesa Goa, aluminium maker Hindalco and Tata Steel were the top gainers, rising over 2 per cent.