However, China's service sector rose at its fastest since three months in June. Manufacturing data from US has rekindled worries about the weakening in the economy and expectations on another round of policy easing.

The Sensex was trading at 17,495 points, higher by 96 points. The Nifty was seen trading higher by 27 points at 5,306 points at 9.30 am IST.

On Monday, markets ended the lacklustre day marginally lower weighed by profit booking.

On the sectoral front on BSE, sectors were trading positively except FMCG, which was trading marginally lower (- 0.30).

Among the shares that gained ground in morning trade were ICICI Bank, Jaiprakash Associates, GAIL and DLF.

Stocks that failed to lure investors in early trade were ITC, Grasim, Jindal Steel and Cairn India.

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