Volatility struck bourses in morning trade as the key indices regained strength soon after trimming early gains. At 10:15 IST, the barometer index, the S&P BSE Sensex, was up 152.79 points or 0.39% at 39,039.43. The Nifty 50 index was up 35.30 points or 0.30% at 11,707.45. Shares of index heavyweight Infosys gained.

Local stocks drifted higher in early trade tracking mostly positive Asian stocks with the Sensex regaining the psychological 39,000 level.

The S&P BSE Mid-Cap index was up 0.34%. The S&P BSE Small-Cap index was up 0.13%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 927 shares rose and 768 shares fell. A total of 80 shares were unchanged.

Index heavyweight Infosys gained 1.55% to Rs 751.90

HDFC Asset Management Company (HDFC AMC) dropped 4.65% after the company announced that it has decided to provide a liquidity arrangement to certain fixed maturity plan (FMP) schemes of HDFC Mutual Fund. The company also stated that arrangements have drafted to deal with the illiquidity faced by such FMP schemes due to their exposure to the non-convertible debentures (NCDs) issued by Edisons Infrapower & Multiventures and Sprit Infrapower & Multiventures, companies promoted by the Essel Group (collectively Essel Group companies). The liquidity arrangement may involve an aggregate outlay not exceeding Rs 500 crore and will be put in place shortly.

Maharashtra Scooters dropped 2.99% while Bajaj Holdings and Investment was up 1.76% after the companies announced that Western Maharashtra Development Corporation transferred its 27% stake in Maharashtra Scooters to Bajaj Holdings & Investment. Maharashtra Scooters has now become a subsidiary of Bajaj holdings & investments.

Sandhar Technologies was up 2.22% after the company announced that it has signed a joint venture agreement with Winnercom Co., South Korea. The joint venture is being established for manufacturing and selling, electronic parts and accessories for the automotive industries in India.

Overseas, most Asian stocks rose as investors await the Federal Reserve's policy-setting meeting due to start Tuesday.

U.S. stocks closed higher Monday on the back of strong gains in social media and entertainment shares such as Facebook Inc. and Netflix Inc.

The US Federal Reserve begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year.