At 11:50AM, the 30-share Sensex was up 168 points at 26,808 and the 50-share Nifty was up 56 points at 8,010.

For the quarter ended June this year, India's gross domestic product (GDP) grew at a nine-quarter high of 5.7 per cent, compared with 4.6 per cent in the previous quarter, driven largely by industry, official data showed on Friday.

The rupee is trading flat at 60.50 compared to its Thursday's close of 60.49 as investors remained cautious ahead of the Supreme Court's hearing today on the coal block allocations later today. Cancellation of the blocks could spark more coal imports and widen trade deficit, some analysts warned.

Most Asian markets were trading with gains shrugging off weak economic data from China and geopolitical tensions in Ukraine. Japanese shares were trading marginally higher with the benchmark Nikkei up 0.3%.

Factory growth in China eased as new orders came in at a slower clip, a business survey showed on Monday. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, fell to 52.4 in August from 53 in July but chalked up its tenth month above the 50 mark that divides growth from contraction. China's benchmark Shanghai was up 0.7% and Hang Seng gained 0.3%. However, Singapore's Straits Times was down 0.3%.

BSE Capital Goods and Realty indices were the top gainers up 2.3 each followed by Consumer Durables, Bankex, Power, Metal and Auto indices.

Capital goods shares were among the top gainers on hopes that order inflows would improve after upbeat first quarter GDP. L&T was up 3% while BHEL which was the top gainer last week was marginally up.

Auto stocks gained after robust August sales from Maruti Suzuki which was up 2.5% after hitting a record high of Rs 2,868. Total sales during August 2014 increased 27% to 110,776 units compared to 87,323 units in August 2013. Hero MotoCorp was up 3%, Bajaj Auto and M&M were marginally up while Tata Motors was down 1%.

Banks which are a proxy to the economy were also among the Sensex gainers with ICICI Bank, SBI, Axis Bank, HDFC Bank up 0.5-2.1% each.

Bharti Airtel was up 2.2% after Airtel Networks Kenya Limited (Airtel Kenya), a wholly owned subsidiary of Bharti Airtel International Netherlands BV has signed a definitive agreement with Essar Telecommunications Kenya Limited, which operates under the brand name yuMobile to acquire its over 2.7 million subscribers.

Other Sensex gainers include, TCS and ONGC among others.

Among other shares, Alstom India has gained 2% after winning contracts worth 800 million euros (approx Rs 6,320 crore) in order to build high-voltage direct current power transmission lines in India, South Korea and Canada, the firm added.

Bajaj Electricals has surged over 3% after the company's engineering and project business unit bagged four new orders aggregating to Rs 602 crore.

In the broader market, BSE Mid-cap index was up 1.2% and the Small-cap index was up 1.1%.

Market breadth was strong with 1,683 gainers and 823 losers on the BSE.