Reuters Market Eye - The BSE Sensex is up 0.72 percent and the Nifty is higher 0.73 percent after gaining over 1 percent earlier in the session after December headline inflation eased to a 5-month low of 6.16 percent.
The Nifty earlier breached the psychological 6,300 level, its highest intraday level since January 2 on easing inflation, but gains were capped at higher levels on profit-taking.
Rate-sensitive stocks led gains after headline inflation eased on lower vegetable prices, increasing odds that interest rates will stay on hold on January 28 when the RBI meets next.
ICICI Bank surges 2.2 percent, while Housing Development Finance Corporation gains 1.5 percent.
Among auto stocks, Tata Motors gains 1 percent, while Hero MotoCorp is up 2.1 percent.
(Reporting by Abhishek Vishnoi)