The BSE Sensex was trading 0.3 percent higher on Friday, helped by gains in Asian and U.S. stocks, with automakers racing ahead.
India's top vehicle maker Tata Motors was up 0.8 percent, while top car maker Maruti Suzuki and top utility vehicle maker Mahindra & Mahindra rose 1.1 percent and 1.9 percent respectively.
"Auto stocks may continue to rise, as sales are buoyant. Also the (federal) budget left more money power in the hands of consumers, which will push up volumes," said K.K. Mital, head of portfolio management services at Globe Capital in New Delhi.
By 9:39 a.m. (0409 GMT), the 30-share BSE index was trading up 0.3 percent at 17,220.13 points, with 21 of its components gaining.
Foreign funds have been net buyers in Indian equities for eight sessions to March 10, pouring in more than $2 billion, a part of which has been absorbed by primary market offerings.
"Market has been consolidating for a while. But, any steep downside is not likely from here, as there are no negative triggers in the offing," Mital said.
Investors awaited the January industrial output data, which is due by 0630 GMT, for further cues.
Industrial output is forecast to have risen 16.65 percent in January from a year earlier, a Reuters poll showed.
Tata Steel, the world's eighth-largest steel maker by output, rose 0.3 percent to 610 rupees.
Its vice-chairman B. Muthuraman said stronger demand in the current quarter would drive its expected 20-percent increase in Indian steel sales volumes and 7-8 percent growth in European sales volumes.
Oil and Natural Gas Corp climbed 0.3 percent to 1,087.70 rupees after Russia said it is considering inviting the Indian state-run firm to develop oil and gas fields in Russia.
In the broader market, gainers aced decliners in a ratio of 1.9:1 in a volume of 56 million shares.
The 50-share NSE index was up 0.4 percent at 5,151.40 points.
STOCKS ON THE MOVE
* Fortis Healthcare extended Thursday's gains and rose 3.5 percent to 184.65 rupees after the hospital chain agreed on Thursday to buy 23.9 percent stake in Singapore's healthcare provider Parkway Holdings for about $685 million.
* Oil explorer Cairn India, a unit of UK's Cairn Energy, rose 2.5 percent to 272.45 rupees after oil prices steadied above $82 per barrel.
* Drugmaker Ranbaxy Laboratories reversed losses and rose 0.8 percent to 463.65 rupees, after it said it was planning to achieve $3 billion in consolidated turnover by 2012 as part of its medium-term business plan.
MAIN TOP 3 BY VOLUME
* Hindalco on 9.5 million shares
* Man Infraconstruction on 1.9 million shares
* Fortis Healthcare on 1.8 million shares
(Reporting by Ami Shah; editing by Malini Menon)
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