The broader markets also inched higher; the BSE Midcap and Smallcap indices gained 0.6 percent each. Two shares advanced for every share declining on the BSE.

Investors were buying shares of IRB Infrastructure Developers on Tuesday after the company has emerged as a preferred bidder for Solapur road project. The stock gained as much as 5 percent intraday.

“IRB Infra has emerged as a preferred bidder for the project of four laning of Solapur to Yedeshi section of NH-211 from km 0.00 to km 100 in the state of maharashtra to be executed as BOT (toll) on DBFOT pattern under NHDP Phase-IV,” the company said in its filing.

Apollo Tyres is on buyers’ radar as the company got reprieve in the Cooper Tire deal. Ccooper Tire and Rubber company’s appeal to force a merger with Apollo Tyres was dismissed by the Delaware Supreme Court. US Cooper Tire had appealed in the court against a Delaware judge’s decision blocking the company’s bid to merge with Apollo Tyres.

Apollo Tyres said it is pleased by the decision and committed to finding a sensible way forward.

Indranil Sen Gupta of Bank of America Merrill Lynch expects 25 basis points hike in repo rate and hawkish talk by RBI on Wednesday.

“We grow more certain of our standing call that the RBI will hike 25bp on Wednesday after higher-than-expected CPI and WPI inflation. We also expect the accompanying commentary to be hawkish to hold inflation expectations and open the door for another 25bp January policy rate hike if inflation hardens. After all, the RBI will not want to take chances with inflation after having already sacrificed so much growth,” he said in his report.

Shares of HDFC Bank fell 2 percent after the Reserve Bank of India barred buying by foreign institutional investors (FIIs) in shares of the country’s second largest private sector lender.

Stakes held by overseas investors, including FIIs, non-resident Indians (NRIs), persons of Indian origin (PIOs), foreign direct investment and global depository receipts, in HDFC Bank have crossed the ceiling of 49 percent of its paid-up capital, the RBI said in a release.

The market has maintained its positive momentum in morning trade supported by ICICI Bank , TCS and Reliance Industries . Bharti, Infosys and Larsen and Toubro too helped the benchmarks.