Equity benchmark indices Sensex and Nifty rallied in early trade on Tuesday as reports of second round of talks between US and Iran are keeping hopes of resolution to the West Asia conflict alive.

Also, Brent crude oil prices trading below the USD 100 per barrel mark provided optimism to the markets.

The 30-share BSE Sensex climbed 445.82 points to 78,966.12 in early trade. The 50-share NSE Nifty advanced 121.15 points to 24,486.

From the 30-Sensex firms, Axis Bank, InterGlobe Aviation, Adani Ports, NTPC, ICICI Bank and HDFC Bank were among the major winners.

Infosys, Tech Mahindra, Tata Consultancy Services and UltraTech Cement were among the laggards.

Brent crude, the global oil benchmark, traded 0.51 per cent lower at USD 94.99 per barrel.

"In the near-term the market will continue to be news-driven, oscillating between hope and fear. Reports of second round of talks between US and Iran are keeping hopes of resolution to the conflict alive. Brent crude at USD 95 and declining spot prices of crude reflect market confidence that the conflict may not last long.

"But if it does, crude price will again spike impacting stock markets," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

In Asian markets, South Korea's benchmark Kospi, Japan's Nikkei 225 index and Hong Kong's Hang Seng index were trading higher, while Shanghai's SSE Composite index quoted lower.

US markets ended marginally lower on Monday.

"On the commodities front, Brent crude oil continues to trade within a consolidation range of USD 93–96 per barrel, reflecting a balance between geopolitical risk premium and demand-supply dynamics," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,059.93 crore on Monday, according to exchange data.

On Monday, the Sensex closed marginally up 26.76 points or 0.03 per cent at 78,520.30. The Nifty edged up 11.30 points or 0.05 per cent to settle at 24,364.85.