The 50-share NSE Nifty ended up 37.05 points, or 0.36 per cent, at 10,397.45 points
Domestic market found its winning ways after three straight sessions of losses, with the BSE Sensex rebounding over 141 points on sustained buying in IT stocks and a recovery in PSU bank counters.
Other than IT stocks, FMCG and oil and gas shares mainly contributed to the market rally.
A firming trend in Asia and a slide in crude oil prices featured on the top among the contributing factors.
Also, short-covering by speculators ahead of February F&O expiry tomorrow added to the upward move.
"After a consecutive down trend, today the market managed to close on a positive note due to the outperformance of IT index and rebound in PSU banks.
"Investors are waiting for fresh triggers to get direction.
"As per the quarter results the earnings started to pick up but concern on inflation & hike in interest rate may add pressure on valuation," Vinod Nair, head of research, Geojit Financial Services Ltd, said.
The 30-share Sensex, after touching the day's high of 33,911.36, succumbed to profit-booking and hit a low of 33,702.50 before settling 141.27 points, or 0.42 per cent, higher at 33,844.86.
The gauge had lost 593.88 points in the previous three sessions, largely dragged down by sustained foreign fund outflows and concerns over tumbling rupee.
The 50-share NSE Nifty ended up 37.05 points, or 0.36 per cent, at 10,397.45 points. Intra-day, it shuttled between 10,426.10 and 10,349.60.
On a net basis, DIIs bought shares worth Rs 1,437.24 crore, while foreign portfolio investors (FPIs) sold shares worth Rs 850.35 crore on Tuesday, as per provisional data released by stock exchanges.
Stocks of IT companies rose today due to the positive outlook given by industry lobby Nasscom.
The industry body said that export revenue in 2018-19 (Apr-Mar) will grow at 7-9 per cent, driven by digital technologies.
IT major TCS was the smartest of the Sensex lot, surging 3.33 per cent. ITC firmed up 2 per cent and ONGC gained 1.66 per cent.
Other gainers were SBI, Infosys, RIL, Kotak Bank, Yes Bank, HDFC LTD, Axis Bank, Maruti Suzuki, ICICI Bank, Bharti Airtel, Wipro, Dr Reddy's and Coal India, rising up to 1.28 per cent.
Shares of Gitanjali Gems slumped for the sixth straight session and were locked in the about 10 per cent lower circuit of Rs 27.46 after reports said the company has intimated its employees about the company's closure.
Since the PNB's massive fraud detection, its stock has tanked over 56 per cent in 5 days. Today, however, the stock edged up 0.47 per cent.
Losses in Sun Pharma, Indusind Bank, Tata Steel, Tata Motors, Bajaj Auto, NTPC, L&T, HDFC Bank, HUL, Power Grid, Asian Paints and M&M, however, squeezed the upside.
The BSE IT took the pole position among sectoral indices, gaining the most by 2.20 per cent, followed by teck 1.79 per cent, FMCG 0.75 per cent, oil and gas 0.42 per cent, banking 0.29 per cent, infrastructure 0.11 per cent and PSU 0.07 per cent.
Bucking the trend, the small-cap and mid-cap indices ended lower by up to 0.17 per cent.
Oil prices witnessed a decline, weighed down by the rebound of the US dollar.
US West Texas Intermediate (WTI) crude futures were at USD 60.98 a barrel, down 81 cents, or 1.31 per cent and Brent crude oil fell $64.46a barrel, down 0.79 cents, or 1.21 per cent from their last settlement.
Asian bourses displayed a firm trend led by Japan's Nikkei, up by 0.21 per cent; while Hong Kong's Hang Seng ended higher 1.81 per cent. Markets in China remained shut on Wednesday.
European markets showed a weak trend in their early deals. Frankfurt's DAX was down 0.74 per cent; while Paris CAC shed 0.55 per cent. London's FTSE fell 0.26 per cent.
Photograph: Shailesh Andrade/Reuters