Easing inflation numbers, released after market hours on Tuesday, too helped the recovery in domestic market sentiment, traders said.

The 30-share index pared some opening gains to trade 122.51 points or 0.33 per cent higher at 37,080.67 at 0930 hours; and the broader Nifty too gained 35.30 points or 0.32 per cent to 10,961.15 in morning trade.

In the previous session on Tuesday, the 30-share index settled 623.75 points, or 1.66 per cent, lower at 36,958.16, while the NSE Nifty slumped 183.80 points, or 1.65 per cent, to 10,925.85.

Top gainers in the Sensex pack included Tata Steel, Vedanta, Yes Bank, Bajaj Finance, Hero MotoCorp, IndusInd Bank, Bajaj Auto, RIL and HDFC, rising up to 3.53 per cent.

While, Sun Pharma, PowerGrid, Maruti, HCL Tech, TCS and Kotak Bank fell up to 4.26 per cent.

Experts said, investor sentiment got a boost as easing retail inflation left room for the Reserve Bank to go for another round of rate cut in October.

Retail inflation eased marginally to 3.15 per cent in July on the back of softening fuel prices even as overall food prices moved up, showed government data on Tuesday.

Retail inflation was 3.18 per cent in June 2019, while it stood at 4.17 per cent in year-ago period (July 2018).

The overall food inflation, measured on Consumer Food Price Index (CFPI), moved up to 2.36 per cent during July from the revised 2.25 per cent print for June 2019, as per data released by the Central Statistics Office (CSO).

Meanwhile, foreign portfolio investors sold shares worth a net of Rs 638.28 crore on Tuesday, while domestic institutional investors purchased shares worth Rs 201.53 crore, provisional data showed.

Elsewhere in Asia, Hang Seng, Kospi, Shanghai Composite Index and Nikkei rebounded to trade higher in their respective late morning sessions, after US President Donald Trump delayed tariffs on electronic goods from China, assuaging investor concerns over US-China trade war.

Bourses on Wall Street too ended significantly higher on Tuesday.

On the currency front, the rupee appreciated 51 paise against its previous close to trade at 70.89 in early session.

Brent crude futures, the global oil benchmark, fell 1.09 per cent to trade at 60.63 per barrel.