The Indian equity benchmarks recovered early losses in late morning deals on Tuesday buoyed by the performance of information technology and energy stocks, with investors eagerly anticipating crucial US inflation figures and the Federal Reserve's upcoming policy decision. The Sensex recovered 470 points from day’s lowest level and Nifty 50 index reclaimed its important psychological level of 23,300.

The NSE Nifty 50 advanced by 0.3 per cent to reach 23,325.40, while the S&P BSE Sensex also climbed by 0.3 per cent to 76,689.02 as of 10:44 am.

All 13 major sectors witnessed gains, with energy stocks leading the charge with a 0.6 per cent increase. The surge was propelled by a nearly 4 per cent rise in ONGC following Jefferies' upward revision of the oil explorer's target price.

US rate-sensitive IT stocks also saw a 0.2 per cent increase as investors awaited the release of the US consumer price index data for May and the Federal Reserve's policy decision on Wednesday.

The Fed is anticipated to maintain rates at their current levels, with investors focusing on any adjustments to projections for rate cuts later in the year.

Heavyweight financial services sector recovered from early losses to register a 0.1 per cent rise ahead of its weekly expiry of Nifty Financial Services index.

Meanwhile, the broader small-cap and mid-cap segments both recorded nearly 1 per cent gains, outpacing the benchmark indices.

However, IndiGo's shares declined by 3.5 per cent as the airline's largest shareholder prepared to sell a 2 per cent stake valued at Rs 3,293 crore, according to a term sheet viewed by Reuters.

Equities have experienced volatility in recent weeks but have rebounded to approach record highs as Prime Minister Narendra Modi secured another term, albeit with a reduced majority for his alliance.

"We need to wait and observe until the budget is presented in a few weeks," remarked Anita Gandhi, founder and head of institution at Arihant Capital Markets.

Finance Minister Nirmala Sitharaman is slated to present the budget next month.

(With Reuters inputs)