At 11:21 am, the Sensex traded 265 points - or 0.66 per cent - higher at 40,096, while the Nifty was up 82 points - or 0.68 per cent - at 12,027.45.

HDFC Bank, TCS and Asian Paints contributed the most to the advances in Sensex.

Analysts say the rally is expected to continue till the presentation of Budget by the government.

“The rally is expected to continue till Budget. Once the Nifty crosses its current all-time high (12,041.15 on May 23), a further 6-7 per cent upside can be expected,” AK Prabhakar, head of research at IDBI Capital, told NDTV.

The government is due to release the GDP data for the final quarter of financial year 2018-19 later in the day.

A survey of economists by news agency Reuters forecast growth slipped to 6.3 per cent annually in the three-month period - its slowest pace in six quarters. If they are right, India would lag China, which notched 6.4 per cent growth in the March quarter, for the first time in one-and-a-half years.

Equities in other Asian markets slid at first but soon drew month-end bargain hunting having suffered a torrid few weeks. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3 per cent - though still down 7.3 per cent for the month so far, China's blue chip index added 0.7 per cent, and Japan's Nikkei pared early losses to be off 0.6 per cent, but was still down 6.5 per cent for the month.

Investors feared that opening a new front in the trade wars would threaten global and US growth, and pressure central banks everywhere to consider new stimulus.