The main 30-share BSE index was up 0.93 percent at 18,213.14 points by 10:46 a.m. (0516 GMT), after having risen as much as 1.1 percent, with all but five of its components in the positive zone.
The benchmark is down 0.6 percent for the week.
The 50-share NSE Index rose 0.82 percent to 5,456.30 points. In the broader market, gainers led losers in the ratio of 2.8:1 on a total volume of about 154 million shares on the NSE.
"Investors are looking for an opportunity to enter into the market to pick up beaten down stocks but I strong believe these gains will fizzle out sooner than later," said Jagannadham Thunuguntla, head of research at SMC Global Securities.
"The macro economic concerns of slowing economic growth rate and rising inflation are not going to go away any time soon and that will continue to weigh on the sentiment."
The BSE index is down 11.2 percent so far this year with worries about inflation and high interest rates in Asia's third-largest economy, and the euro zone debt crisis reducing appetite for risky assets.
The Indian central bank has been one of the most aggressive central banks in tightening policy to tame stubbornly high inflation, raising rates nine times since March 2010.
Analysts said the market outlook in the short to medium term would also be determined by monsoon rains, which the Indian meteorological department expects to arrive around Tuesday in the southern coast.
Normal monsoon rain is crucial to India's economy and boosts farm incomes and spending on cars, motorcycles, consumer goods and even gold, which is used for investment.
Shares in ICICI Bank rose 2.6 percent to 1,052 rupees and Reliance Industries advanced 1.2 percent to 945.40 rupees on value buying. The two stocks have fallen 8 percent and 5 percent, respectively, this month to Thursday.
Tata Motors shares fell as much as 6.2 percent to their lowest level in three months after the company warned on Thursday competitive pressures and high input costs were challenges.
It was the biggest loser in the benchmark index and was trading down 5.5 percent at 1,098.20 rupees. Traders said the company's profit margins would be under pressure in the next few quarters due to rising raw material costs.
"The outlook on the entire automobile sector is not very positive in the coming quarters mainly due to rise in interest rates and commodity prices," Thunuguntla said.
Tech Mahindra Ltd was trading up 0.2 percent at 658.50 rupees, after the company said pricing outlook for its technology services was stable with a positive bias.
On Thursday, it said quarterly profit fell more than a half due to losses related to unit Mahindra Satyam, and analysts said the company's numbers were in-line with expectations excluding the arm's loss.
State-run refiner Hindustan Petroleum Corp rose 2.5 percent to 364.15 rupees after its chairman said on Thursday it has revived plans to build in a consortium a $10 billion refinery-cum-petrochemical project in southern India.
Software services provider Mphasis Ltd, majority owned by Hewlett-Packard , fell 3.6 percent to 432 rupees, after it reported quarterly net profit fell 18.7 percent to 2.17 billion rupees.
Copyright Reuters, 2011