The 30-share index of the Bombay Stock Exchange, which had gained about 230 points in the previous two sessions, rose by 75.01 points, or 0.39 per cent, to 19,167.06 points.
Likewise, the broad-based National Stock Exchange index Nifty also moved up by 23.60 points, or 0.41 per cent, to 5,747.65 points.
Brokers said buying by funds and retail investors in line with firming trend in Asian markets following overnight gains on the US market on positive earnings expectation, helped the Sensex post early gains.
They said concerns over inflation and fears of hike in interest rates, capped the gains.
Oil and gas, metal, consumer durables and banking stocks were trading in the positive territory.
Meanwhile, Japan`s Nikkei Index rose by 0.19 per cent while Hong Kong`s Hang Seng Index was up 0.56 per cent in the morning trade. In the US, the Dow Jones Industrial Index ended 0.43 per cent up on Tuesday.