Continuing yesterday's winning streak, the 30-share index rose further by 61.03 points, or 0.24 per cent, to 25,784.19, with all the sectoral indices, led by auto and banking, trading in positive zone with gains up to 0.62 per cent.
The Sensex had gained over 242.32 points in the previous session.
Experts believe markets could turn volatile after RBI governor Raghuram Rajan presents the monetary policy. "Indian markets are likely to open positive following the positive Asian markets but may turn volatile as RBI announces its monetary policy review. Nifty may correct further from the current level and it may touch 7500 in the near term. Key near term support is at 7450. Resistance is at 7700.However, the Nifty is likely to consolidate within a range of 7500 7800," Standard Chartered Securities said in its morning note
The National Stock Exchange index Nifty rose 13.95 points, or 0.18 per cent, to 7,697.60 in early trade.
Brokers said selective buying by cautious funds and retail investors ahead of RBI's bi-monthly policy review later in the day influenced the trading sentiments.
Technology stocks and defensives such as healthcare leading gains.
Among other Asian markets, Hong Kong Hang Seng gained 0.32 per cent, while Japan's Nikkei was up by 0.21 per cent in early trade today.
The US Dow Jones Industrial Average ended 0.46 per cent higher in yesterday's trade.
With Agency Inputs