Indian benchmark indices were headed for their best month since August last year, with shares hitting a three-month high on Friday as metal and auto stocks advanced.
The Nifty was up 0.8% at around 17,060, in early trade, while Sensex rose 0.7% to around 57,260.
The indices, which hit their highest levels since April 29, were up over 8% so far this month on gains in auto, bank and metal stocks.
Investor sentiment also got a boost after data showing economic contraction in the U.S. economy for a second straight quarter raised hopes that the US Federal Reserve may not opt for aggressive interest rate hikes.
"Every negative news on the economic front is actually being taken as good news by markets as they sense that weakness in economic activity will lead to constructive policies to support growth," said Saurabh Jain, assistant vice-president, research, at SMC Global Securities.
"The absence of selling and some small buying from foreign institutional investors have also helped sentiment," Jain said.
Foreign investors have sold a net $320.85 million worth of Indian equities so far this month, the smallest outflow since November 2021.
Nifty Metal rose 3.3% on hopes of strong demand in top consumer China, while Nifty Auto gained 1.3%, with TVS Motor Co up 6% after reporting a higher June-quarter profit.
SBI Life Insurance rose 9.1% and was the top gainer in the Nifty after reporting a higher quarterly profit.
Shares of industrial equipment maker GMM Pfaudler rose as much as 18% after reporting a 17-fold jump in quarterly profit.
The rupee strengthened to its highest in nearly three weeks against the dollar, that fell on easing concerns over aggressive interest rate hikes by the Fed.