The BSE Sensex is up 0.8 percent after hitting its highest intraday level in two months while the Nifty also gains 0.87 percent.
The Reserve Bank of India's move to tighten gold imports again on Monday with an eye to cut a record current-account deficit is seen as a broader positive for equities, dealers say.
Blue chip bank stocks gain on value buying after recent sharp falls, with a 6.4 percent fall in NSE's banking sub-index last week.
ICICI Bank Ltd gains 1.3 percent while HDFC Bank Ltd is up 1 percent.
Hero MotoCorp Ltd is flat a day ahead of April-June results.
Titan Industries Ltd is trading up 5.6 percent, after slumping as much as 6.6 percent, after the Reserve Bank of India moved to tighten gold imports.