At 12:16 pm, the Sensex traded 276.20 points - or 0.66 per cent - higher at 41,875.92, while the Nifty was up 71.65 points - or 0.58 per cent - at 12,328.45.

Top percentage gainers on the 50-scrip index at the time were Infosys, Coal India, Wipro, Hindustan Unilever and Indian Oil, up between 1.55 per cent and 4.34 per cent. Thirty four stocks on the Nifty moved higher at the time.

On the other hand, Yes Bank, Tata Motors, Bharti Infratel, Eicher Motors and UPL - trading between 1.01 per cent and 5.59 per cent lower - were the top Nifty losers.

Infosys, HDFC Bank and Hindustan Unilever were the top contributors to the gain in Sensex, together accounting for a gain of more than 180 points on the index.

According to analysts, hopes of a strong earnings season drove the gains. “Liquidity is driving the current rally, besides optimism on corporate earnings after Infosys results exceeded market expectations,” AK Prabhakar, head of research at IDBI Capital, told NDTV.

Infosys shares rose more than 4 per cent after the IT major kicked off the earnings season by reporting a net profit of Rs 4,457 crore for October-December period last Friday, beating analysts' expectations. The company also said it found no evidence of financial misconduct by its executives following a investigation into whistleblower complaints.

“With the budget nearing, one can expect huge euphoria in the markets before any correction,” Mr Prabhakar added.

Equities in other share markets paused near 19-month peaks ahead of the expected signing on a US-China trade deal, though talks on a phase two package are likely to drag on for months. MSCI's broadest index of Asia-Pacific shares outside Japan barely budged, having hit the highest since mid-2018 last week. Japan's Nikkei was closed for a holiday.

The main event of the week will be the signing of the Phase 1 trade deal between the United States and China on Wednesday. The Trump administration has invited at least 200 people to the White House for the ceremony.