The Sensex and the Nifty were trading higher by nearly one per cent on value-buying by investors in recently beaten down stocks amid firm Asian cues.

Domestic sentiment was also buoyed as weak US inflation data dampened prospects of a rate hike this year, lifting sentiment across global markets.

At 2.05 p.m., the 30-share BSE index Sensex was up 284.53 points or 0.91 per cent at 31,498.12 and the 50-share NSE index Nifty was up 95.2 points or 0.98 per cent at 9,806.

Barring IT and TECk, all other BSE sectoral indices were trading in the positive zone. Among them, realty index was the star-performer and was up 4.54 per cent, metal 3.49 per cent, infrastructure 2.62 per cent and consumer durables 2.55 per cent. On the other hand, IT index was down 0.24 per cent and TECk 0.05 per cent.

Top five Sensex gainers were Cipla (+4.71%), Tata Steel (+3.71%), Hero MotoCorp (+3.1%), Adani Ports (+3.00%) and Sun Pharma (+284%), while the major losers were Kotak Bank (-0.95%), Bharti Airtel (-0.88%), Infosys (-0.75%), Wipro (-0.48%) and TCS (-0.28%).

Real estate developer DLF Ltd surged as much as 13.7 per cent after saying on Saturday it was in the final stages of talks for a transaction involving its rental unit arm.

DLF had previously said it was in talks with Singapore sovereign wealth fund GIC to sell a 40 per cent stake in its property rental unit.

Meanwhile, Sun Pharmaceutical Industries and Bharat Petroleum Corp Ltd fell, after posting disappointing June-quarter results on Friday.

“The strength and recovery in global markets did lend some support to our indices,” said Pritesh Mehta, head of technical research, IIFL Wealth.

“But thereafter, the reason has been the strength in Bank Nifty, HDFC, and exhaustion of selling pressure in the markets.”

Asian stocks bounced on Monday after three losing sessions, tracking a firmer Wall Street, while the dollar was weighed down by weak US inflation data which dampened prospects of another Federal Reserve interest rate hike later this year.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4 per cent. The index had fallen for three straight days prior on escalating tensions between the United States and North Korea. Australian stocks rose 0.2 per cent and South Korea's KOSPI climbed 0.7 per cent. Japan's Nikkei bucked the trend and fell 1.2 per cent as a stronger yen overshadowed much better-than-expected second quarter economic growth.