The benchmark BSE Sensex was trading higher by over 200 points led by capital goods, power, oil & gas and bank stocks amid firm global cues.

Brokers said that the domestic sentiment was buoyed due to a firm trend in other Asian markets as concerns over North Korea eased and hurricane Irma’s force waned.

At 12.35 p.m., the 30-share BSE index Sensex was up 204.40 points or 0.65 per cent at 31,891.92 and the 50-share NSE index Nifty was up 71.8 points or 0.72 per cent at 10,006.60.

Among BSE sectoral indices, capital goods index was the star-performer and was up 2.00 per cent, followed by power 1.22 per cent, oil & gas 1.14 per cent and banking 1.07 per cent. Only TECk index was down 0.09 per cent.

Top five Sensex gainers were L&T (+2.46%), Maruti (+1.8%), HUL (+1.49%), HDFC Bank (+1.48%) and Coal India (+1.2%), while the major losers were Bharti Airtel (-0.66%), Infosys (-0.66%), State Bank of India (-0.61%), ICICI Bank (-0.19%) and Hero MotoCorp (-0.03%).

Shares of carmakers such as Maruti Suzuki India Ltd, Tata Motors Ltd and Mahindra and Mahindra Ltd were up more than 0.5 per cent each.

The Government had said on Saturday it would increase taxes for mid-sized, large, and sports utility vehicles under the recently unveiled nationwide tax.

The quantum of the increase was less than expected and tax rates for smaller cars and hybrid vehicles were not raised, comforting investors.

Among other gainers, shares of IndusInd Bank Ltd rose 1.1 per cent, while Bharat Financial Inclusion Ltd gained more than 3 per cent after the financial firms entered into exclusive talks for a potential strategic combination.

Asian shares

Investors in Asia reacted with relief after North Korea did not conduct another missile test this weekend, when it celebrated its founding anniversary. The MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 per cent.

Still, the sentiment was broadly cautious after indexes posted their first weekly fall in four last week, as investors monitored global risk factors and awaited consumer inflation data due on Tuesday.

Retail inflation

The country's retail inflation is expected to have picked up to a five-month high of 3.20 percent in August, largely driven by higher food costs, a Reuters poll showed on Monday, potentially reducing the scope of further rate cuts by the central bank.

The markets are in a wait-and-watch mode ahead of the CPI data, said Vinod Nair, Head of Research at Geojit Financial Services.