The 30-share index was trading 123.95 points, or 0.33 per cent, up at 37,618.07 at 0930 hours, while the broader Nifty rose 43.45 points, or 0.39 per cent, to 11,101.30 in early trade.

In the previous session, the BSE barometer closed 792.96 points, or 2.16 per cent, higher at 37,494.12; and the Nifty reclaimed the 11,000-level, advancing 228.50 points, or 2.11 per cent, to 11,057.85.

Top gainers in the Sensex pack in early trade on Tuesday included Tata Motors, SBI, Tata Steel, L&T, Axis Bank, Bajaj Finance, IndusInd Bank and NTPC, rising up to 2 per cent.

On the other hand, Infosys was the biggest loser on the index, shedding over 2 per cent, after the IT major has bought back 11.05 crore of its shares under its Rs 8,260-crore buyback offer that began in March this year.

HCL Tech, TCS, TechM, Kotak Bank and Asian Paints too fell up to 2 per cent.

Domestic equities followed global stocks, that rallied after US President Donald Trump Donald Trump said China-US trade talks would resume soon, traders said.

Investor sentiment was revived by the government move to withdraw additional surcharge on foreign investors and initiate measures to revive the economy.

According to Vinod Nair, Head of Research, Geojit Financial Services, the strongest message to the market is that government is concerned about the slowing economy and intends to support the situation with corrective measures.

"The initial set of actions, though small, has enhanced market's sentiment and confidence," he said adding that the market will trade in a positive bias awaiting further development regarding additional measures and US–China trade talk.

Meanwhile, the Reserve Bank of India (RBI) on Monday approved the transfer of record Rs 1.76 lakh crore dividend and surplus reserves to the government, boosting Prime Minister Narendra Modi-led regime's prospect to stimulate the slowing economy without widening fiscal deficit.

Foreign portfolio investors sold shares worth a net of Rs 752.90 crore on Monday, while domestic institutional investors purchased shares worth Rs 1,272.29 crore, provisional data showed.

The rupee, meanwhile, appreciated 22 paise against its previous close to trade at 71.80 in early session.

Elsewhere in Asia, bourses in Hong Kong, Korea, Shanghai and Japan were trading significantly higher in their respective late morning sessions.

Exchanges on Wall Street too ended in the green on Monday.

Global oil benchmark Brent crude was trading 0.53 per cent higher at 58.43 per barrel.