The BSE Sensex ended at 17,597, having advanced 119 points and the Nifty at 5,359, up 41 points.
During the day, the BSE benchmark index had touched the day's high at 17,664 and the day's low at 17,570.
Further, the rupee climbed to its strongest level in nearly two weeks, the first session of the new financial year 2012-13, bolstered by bunched dollar inflows after a three-day weekend.
The currency, which fell 12.35% in 2011-12, was helped by improved outlook for risk taking after strong manufacturing data from the United States and China, traders said.
In Asia, Japan's Nikkei share average fell but remained above 10,000, with the yen's climb to a three-week high against the dollar prompting investors to lock in profits on blue-chip exporters that have logged sharp gains since January.
The index ended at 10,050, down 0.59%.
The Hang Seng advanced 1.31%, while the Shanghai Composite index gained 0.47%.
Meanwhile, European markets are lower today with shares in London off the most.
At 1600 hours, the FTSE 100 was down 0.22% while France's CAC 40 was off 0.19% and Germany's DAX was lower by 0.05%.
Back home, index heavyweight RIL gained nearly 2% at Rs 753 and accounted for a 25-point gain on the Sensex.
RIL's Jamnagar manufacturing unit is planning to take Maintenance and Inspection shutdown of one of the diesel hydro treating unit for approximately three weeks duration from 2 April 2012.
Banking stocks rose on growing expectations of a rate cut from the RBI during its mid-April meeting.
The prominent gainers from the pack were Federal Bank, State Bank of India and ICICI Bank, up 2% each.
ICICI Bank accounted for a 23-point gain on the BSE benchmark index.
BSE Consumer Durables index ended at 6,794, up 2.14%. Whirlpool of India, TTK Prestige, VIP Industries and Blue Star, up 4-8%
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