Key indices extended gains in mid-morning trade. At 11:20 IST, the barometer index, the S&P BSE Sensex, was up 230.29 points or 0.6% at 38,444.60. The Nifty 50 index was up 58.40 points or 0.51% at 11,399.55. The Nifty was trading near its 100-day simple moving average placed at 11,407.74.

Shares advanced amid hopes that the central bank will continue with accommodative policy and further cut key interest rates in the next policy review.

In the broader market, the S&P BSE Mid-Cap index rose 0.51% and S&P BSE Small-Cap index was up 0.19%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 865 shares rose and 830 shares fell. A total of 125 shares were unchanged. In Nifty 50 index, 38 stocks advanced while 12 stocks declined.

On the domestic front, the general consumer price index (CPI) inflation rose to 3.99% in September 2019, compared with 3.28% in August 2019. The corresponding provisional inflation rate for rural area was 3.24% and urban area 4.78% in September 2019 as against 2.25% and 4.49% in August 2019. The core CPI inflation eased to 3.99% in September 2019 compared with 4.20% in August 2019. The cumulative CPI inflation has declined to 3.27% in April-September FY2020 compared with 4.32% in April-September FY2019.

The Reserve Bank of India (RBI) aims to achieve the medium-term target for CPI inflation of 4% within a band of +/-2%, while supporting growth. RBI on 4 October reduced repo rate by 25 basis points (bps) to 5.15%. It was the fifth straight rate cut from the RBI, resulting in an overall decline of 135 bps or 1.35 percentage point in the key lending rate. The next meeting of the MPC is scheduled during 3-5 December 2019.

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, dipped further down to 39-months low of 0.3% in September 2019 from 1.1% in August 2019. The WPI based inflation has been moderating consistently for last five straight months from 3.2% in April 2019. The data was unveiled during trading hours on Monday, 14 October 2019.

Shares of IRCTC was down 1.63% at Rs 716.75 amid profit booking after a stellar debut yesterday, 14 October 2019. The stock was listed at Rs 644 on BSE, a premium of 101.25% to the IPO price of Rs 320. It closed at Rs 728.60 on BSE, a premium of 127.69% over the IPO price.

The Nifty Auto index extended its gaining streak for third consecutive session. The index gained 3.18% in three trading session from its previous closing of 7359.65 on 10 October 2019. The Nifty Auto index was trading 0.97% higher at 7593.35.

Auto stocks advanced. Eicher Motors (up 4.39%), SML Isuzu (up 2.65%), Maruti Suzuki India (up 2.07%), Hero MotoCorp (up 2%), Ashok Leyland (up 2%), Mahindra and Mahindra (up 1.24%) and Bajaj Auto (up 0.81%) rose.

Jindal Drilling & Industries jumped 14.5% to Rs 82.5 after the company announced that it was awarded contract from ONGC. The contract is for charter hire of offshore drilling rig for period of 3 years.

Overseas, most Asian stocks were trading lower on Tuesday, following the previous day's rally, as new doubts emerged overnight about the U.S.-China partial trade deal. China wants another round of talks before signing what U.S. President Donald Trump last week called a very substantial phase one deal between the two countries.

U.S. Treasury Secretary Steven Mnuchin reportedly expects the mid-December round of tariffs to take effect if no deal is reached between the countries.

US stocks edged lower on Monday as investors turned their focus on the third-quarter earnings season, which begins in earnest on Tuesday.