Markets on Tuesday edged up recovering from mid-day losses as buying activity was observed in Oil&Gas, Banking and Capital Goods shares.
Firm opening of European markets during late noon trading session also boosted the local investors’ sentiment.
Meanwhile, India is committed to easing bottlenecks that have caused inflation to spike, Finance Minister Arun Jaitley said, blaming energy costs and "speculative hoarding" for a rise in wholesale prices that contributed to an investor selloff on Monday.
The S&P BSE Sensex traded nearly 330 points or 1.31% up at 25,521.19 while the CNX Nifty surged by 98 points or 1.3% at 7,631.70.
Moreover, the broader markets outperformed the benchmark indices, as the BSE Mid-cap and Small-cap indices gained 1.5.% and 2% respectively.
The market breath at the BSE ended firm with 2,049 shares advanced while 950 shares declined.
Ranak Merchant, Technical Analyst at Sushil Financial Services said, “As Nifty (spot) hit 7700, the momentum with which new life highs were tested, appeared to be slowing and thus a quick correction was on the cards. Yesterday's session saw the benchmark index slip below multiple bottom supports of 7580. From current levels 7350-7400 appears to be a good support zone and a correction till this zone would prove healthy for markets. With crude prices rising and INR depreciating, keep an eye on these two for signs of reversal.”
European shares gained buoyed by merger activity, with Germany's DAX and France's CAC 40 have gained marginally, after Wall Street shares eked out small gains.
Most Asian stock markets fell on Tuesday as the deepening conflict in Iraq and a gas dispute between Ukraine and Russia sapped investors' appetite for riskier assets.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.3%. Japan's Nikkei bucked the trend with rise of a 0.3%, though it was still down on the week so far.
The rupee rose to 60.1350/1450 compared with 60.1550/1650 per dollar on Monday, as large foreign banks sell dollars on behalf of exporters, traders say.
The rupee was trading marginally stronger in the spot offshore NDF market, prompting traders to sell dollars in domestic spot market to narrow the differential.
BSE Oil & Gas index surged by nearly 3% followed by counters like Banks, Capital Goods, Power, Metal, Realty, Consumer Durables and Auto all gaining between 1-2%.
Apart from FMCG, all major sectoral indices ended in positive zone.
Among the 30-share pack at the Sensex, ONGC was the top gainer which surged over 4% followed by Axis, SBI, Coal India, BHEL, ICICI Bank and RIL, all up between 2% - 4%.
The top loser was M&M as the scrip shed nearly 2%.
Other losers were Hero Motocrop, Tata Steel, Dr Reddy’s Lab slumped nearly 2%.
Shares of oil and gas companies moved higher by up to 5% in late noon deals on the BSE. BPCL, HPCL, Indian Oil and Gail India were up between 2-5%.
Among other stocks, weaker rupee during mid-day trades lifted up Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, MphasiS, Hexaware Technologies, Mindtree and Tech Mahindra were up 1-2%.
Idea Cellular moved up by nearly 4% to Rs 141, extending its previous day’s 1% gain, after the Reserve Bank of India (RBI) announced that FPIs can purchase up to 49% stake from 24% earlier.
Fulford (India) locked in down circuit of 5% at Rs 1,584 on BSE after Dashtag, the promoter of the company said it may consider other strategic alternatives in relation to its ownership of shares in the company, if the delisting offer not be successful.
Ricoh India tanked 20% to Rs 172 on BSE after the failure of delisting offer announced by Ricoh Asia Pacific Pte, the promoter of the company.
Scrips of sugar companies rallied up to 6% on hopes turnaround this financial year.
Balrampur Chini Mills, Bajaj Hindustan, Dwarikesh Sugar Industries, Dhampur Sugar Mills, Simbhaoli Sugar Mills, Triveni Engineering & Industries, and Shree Renuka Sugars are ended high in the range of 4-6%.