Firmness prevailed on the bourses in mid-afternoon trade on sustained buying demand in index pivotals. At 14:24 IST, the barometer index, the S&P BSE Sensex, was up 159.94 points or 0.44% at 36,507.02. The Nifty 50 index was up 61.05 points or 0.56% at 10,969.75. FMCG stocks gained. Telecom stocks rose. Domestic shares firmed up as crude prices declined and the Reserve Bank of India (RBI) announced an open market bond purchase for January.

Domestic stocks drifted higher in early trade, extending their prior six-day rising trend, boosted by an overnight slump in global crude oil prices. Stocks hovered in small range near day's high in afternoon trade.

The S&P BSE Mid-Cap index was up 1.41%. The S&P BSE Small-Cap index was up 1.03%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1627 shares rose and 903 shares fell. A total of 151 shares were unchanged.

FMCG stocks gained. Britannia Industries (up 1.74%), GlaxoSmithkline Consumer Healthcare (up 0.01%), Colgate-Palmolive (India) (up 1.14%), Dabur India (up 2.93%), Godrej Consumer Products (up 0.04%), Hindustan Unilever (up 0.32%), Marico (up 2.47%), Nestle India (up 0.74%), Tata Global Beverages (up 0.45%), Procter & Gamble Hygiene and Health Care (up 0.34%), Jyothy Laboratories (up 3.66%) and Bajaj Corp (up 0.96%) rose.

Telecom stocks rose. Bharti Airtel (up 1.21%), Vodafone Idea (up 1.34%), MTNL (up 2.84%) and Tata Teleservices (Maharashtra) (up 11.95%) gained. Reliance Communications (down 9.44%) declined.

Oil prices slumped over 5% on Tuesday in heavy trade due to fears of oversupply and deteriorating demand. India imports majority of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure.

On the macro front, on a review of the evolving liquidity conditions, RBI has decided to scale up the amounts to be purchased in the remaining two Open Market Operations (OMO) auctions scheduled in December 2018 to Rs 15000 crore each. Consequently, the total injection of durable liquidity for the month of December 2018 would amount to Rs 50000 crore.

Further, based on an assessment of the durable liquidity needs going forward, RBI has decided to conduct purchase of Government Securities under OMOs for an aggregate amount of Rs 50000 crore in the month of January 2019. The operations will be conducted through five auctions of Rs 10000 crore each.

The liquidity conditions will continue to be monitored and depending on the assessment, RBI will consider similar quantum of OMO purchases until end of March 2019. The exact calibration of the quantum of OMO would depend on sustained changes in the behaviour of currency in circulation, the magnitude of sterilisation operations for RBI's forex operations and other relevant factors.

Overseas, European stocks inched slightly higher while Asian stocks were mixed Wednesday ahead of a highly anticipated Federal Reserve meeting that is expected to set the tone for interest rates next year.

On Wednesday, Japan reported that its trade balance in November was a deficit of 737.3 billion yen, from 450.1 billion yen in the previous month. This is its fourth deficit in last five months. The country's exports broadly slowed, partly due to weakening demand from China. Japanese exports rose 0.1% from a year earlier, as compared to October's 8.2% gain.

US stocks nudged higher on Tuesday in a volatile day as technology and consumer-focused companies climbed.

The Federal Reserve wraps up its final policy meeting of 2018 on Wednesday. The Federal Open Market Committee is expected to raise its short-term interest rate by a modest quarter-point to a range of 2.25% to 2.5%. Investors are closely watching the Federal Reserve monetary policy guidance for 2019. The central bank forecasts three more rate hikes in 2019, but softer global growth could cause a shift in its hawkish stance. The Bank of Japan's monetary policy decision is due Thursday, followed by a briefing from Governor Haruhiko Kuroda. A Bank of England decision is also due on Thursday.