Benchmark indices ended near day’s high led by buying in index heavyweight Reliance Inds.
Firm opening of the European markets has also cheered the sentiments among local investors.
The Sensex ended at 19,041 -- up 176 points -- closing above the 19K mark after two weeks. Nifty ended up 44 points at 5,748.
Meanwhile, Japan's Nikkei average fell 1.1% to a nearly four-week low with exporters leading the decline after weak US factory data overnight stoked concern about growth prospects for the world's biggest economy.
Gains in real estate firms, however, helped pare back steep losses on expectations that the Bank of Japan will ease monetary conditions further at its policy meeting this week.
European shares rose and the euro edged away from a four-month low on Tuesday but gains were limited as investors awaited data on the region's factory output and remained concerned about consequences of the Cyprus bailout.
Euro zone manufacturing activity indexes for March, due later, are expected to add to concerns about the fragile global economic recovery revealed in weaker than expected data from China and the United States on Monday.
Foreign institutional investors bought shares worth a net Rs 313.07 crore on Monday, 1 April 2013, as per provisional data from the stock exchanges.
The index of eight core industries fell 2.5% in February 2013 compared to their 7.7% growth in February 2012, data released by the government Monday.
Market Economics will unveil the result of a monthly survey on the performance of India's services sector for March 2013 tomorrow, 3 April 2013.
All eyes will be towards the PMI data for direction, ahead of the Q4 results season which is set to begin on April 12, 2013 with Infosys.
On the sectoral front, BSE Metal index surged by 2% followed by counters like oil & gas, capital goods, healthcare, PSU, Consumer Durable, Power, Realty, Banks and IT, all gaining by 1% each.
Mukesh Ambani owned Reliance Jio has signed a Rs 1,200 crore agreement to share Anil Ambani owned Reliance Communications' optic fibre network. According to the agreement, Reliance Jio Infocomm will utilise multiple fibre pairs across RCom's 1,20,000 kilometeres of inter-city fiber optic network.
Following this news, Reliance ADAG stocks rose 4-10% each.
Larsen and Toubro (L&T) traded higher by 2% at Rs 1,422 after the company said it has secured new orders worth of Rs 3,700 crore across various business segments in March 2013.
Wipro jumped 4.3% at Rs 450 after the company said that the scheme of arrangement for demerging its non-IT businesses into a separate unlisted company called Wipro Enterprises is effective from March 31.
Maruti Suzuki India moved higher by 2% at Rs 1,309, bouncing back almost 4% from intra-day’s low after reporting 9.5% month-on-month growth in car sales at 119,937 units for the month of March.
Other notable gainers were Sun Pharma, Sterlite, ONGC, Cipla, RIL, Tata Steel, HDFC Bank and SBI.
However, Bajaj Auto traded lower by 1.5% at Rs 1757 after reporting 10% year-on-year (yoy) drop in total sales at 301,231 units for the month of March 2013.
The country’s second largest two-wheeler maker had sold 335,515 units during the same month previous year.
Among other shares, sugar stocks rose across the board on reports the Cabinet Committee on Economic Affairs is likely to discuss a proposal on sugar decontrol today, 2 April 2013.
Reliance Communications (RCom) has surged 16% to Rs 66.20 after the company said it has sign Rs 1,200 crore agreement with Reliance Jio Infocomm for sharing the company’s inter-city optic fiber network.
Shares in United Spirits Ltd fell more than 1.5% at Rs 1890 on reports that banks have started selling stocks in India's biggest alcohol maker to recover Kingfisher Airlines Ltd debt, dealers say.
Shares in Ambuja Cements Ltd gained 1.2% after CLSA upgraded the stock to "buy" from "outperform", citing 'reasonable' valuations following recent correction.
The market breadth in BSE ended healthy with 1,953 shares advancing and 827 shares declining.