Software bellwether Infosys Technologies bucked the trend and fell as much as 3.6 percent, extending Friday's near 10 percent slide after reporting disappointing results.
A slew of brokerages downgraded the target price on the firm's shares, citing concerns after it posted quarterly earnings and an annual forecast below expectations.
At 10:13 a.m. (0443 GMT), the 30-share BSE index was up 1.13 percent at 19,605.68 points, with 28 components advancing.
The index has rallied 9.6 percent since the start of March, as foreign institutional investors (FIIs) funds pumped in $3 billion after being net sellers in January and February.
"Over the last one month, around $1.5 billion has come into the market. There has been a growing feeling that increased liquidity will keep markets buoyant," Gajendra Nagpal, CEO of Unicon Financial said.
The 50-share NSE index was up 1.02 percent at 5,884. In the broader market, gainers were nearly double the number of losers, with 112.4 million shares changing hands.
Leading lenders State Bank of India, ICICI Bank and HDFC Bank were up between 1.1 and 1.4 percent.
HDFC Bank, the country's third-largest lender, will report fourth-quarter results later in the day. The country's top lenders are expected to report strong profit growth in the March quarter, bolstered by a rise in corporate loan demand and fee income.
" If the money is coming in through FIIs, banking is going to be a natural beneficiary," Nagpal said.
Investors, however, are wary of further interest rate increases after headline inflation in March surged.
"Investors are still hopeful that inflation has reached a peak in March, that crude prices will correct and that earnings will be good," Neeraj Dewan, director of Quantum Securities, said.
India's headline inflation surged to nearly 9 percent in March, far above forecasts, on higher fuel and manufacturing prices, adding pressure on the central bank to take bolder action despite raising interest rates eight times since March 2010.
Infosys was trading down 1.2 percent at 2,954 rupees. The country's second-largest outsourcing firm lagged market expectations on Friday despite a 13.7 percent rise in quarterly profit, hurt by higher expenses in a seasonally weak quarter.
Leading engineering and construction firm Larsen & Toubro rose 1.8 percent to 1,759 rupees, after two sources told Reuters on Friday the company plans to sell its electrical and electronics unit in a deal that could be worth $3 billion.
Sterlite Industries India Ltd rose 1.8 percent after the Business Standard newspaper reported it plans to double capacity at its copper smelting plant in Tamil Nadu with an investment of around 25 billion rupees.