The S&P BSE Sensex and NSE Nifty 50 Indexes extended gains led by HDFC, Reliance Industries, ICICI Bank, Larsen & Toubro, ITC and Infosys. The Sensex rose as much as 358 points and the Nifty 50 Index touched an intraday high of 11,140. Gains in domestic equity markets were in line with other Asian peers which surged after reports of a potential stimulus package from Germany boosted sentiment across global markets.

As of 12:40 pm, the Sensex traded 0.9 per cent or 340 points higher 37,690 and the NSE Nifty 50 Index climbed 0.81 per cent or 89 points to 11,137.

Nine of 11 sector gauges compiled by National Stock Exchange were trading higher led by the Nifty Pharma index's 1.7 per cent gain. Nifty Realty, Private Bank, Financial Services, Bank, FMCG and IT indexes also rose between 0.7-1.2 per cent each.

On the other hand, Nifty PSU Bank Index was top loser, down 0.6 per cent.

Mid- and small-cap shares were in-line with larger peers as the Nifty Midcap 100 and Nifty Smallcap 100 Indexes rose 0.6 per cent each.

Sun Pharma was top gainer in the Nifty 50 basket of shares. The stock rose as muh as 4.7 per cent to hit high of Rs 434 after the company signed a long-term licensing deal to develop generic products in China.

Bharti Infratel, Larsen & Toubro, NTPC, ICICI Bank, HDFC, Dr. Reddy's Labs, Tech Mahindra and Titan were also among the gainers.

On the flipside, Yes Bank, State Bank of India, Grasim Industries, UPL, Bharat Petroleum, GAIL, Tata Steel and Zee Entertainment were among the laggards.