The key benchmark indices extended gains in afternoon trades today. The Sensex rose 175 points to 16,917 and the Nifty gained 47 points to trade at 5,023.

Auto, IT and oil & gas stocks trended higher today. The BSE auto and IT indices were up over 1.4 per cent. The oil & gas index was also up 1 per cent.

In the Sensex pack, HDFC was the biggest gainer. The stock surged nearly 5 per cent while Tata Motors was up 3.2 per cent. ITC also gained 2.4 per cent.

Bhart Airtel, however, was down 2.4 per cent.

Asian stock markets were trading higher on Tuesday amid optimism the region's economies can help lead a global recovery.

Most markets gained in lackluster trade, with Japan and a couple other countries' bourses closed for holidays. Crude oil prices rose following a big fall overnight as the dollar weakened against the yen and euro.

The Asian Development Bank said on Tuesday that Asia has held up better than expected amid the global downturn and raised its growth forecasts for China and India.

Hong Kong's Hang Seng added 109.20 points, or 0.5 percent, to 21,582.05, and South Korea's Kospi gained 24.19 points, or 1.4 percent, to 1,719.69.