The 30-share Sensex ended up 130 points at 20,161 and the 50-share Nifty gained 28 points to end at 6,111.
Japan's benchmark share index Nikkei rose on Tuesday, with investors picking up recently battered stocks as the market regained a degree of stability after the extreme volatility of the past few days.
The Nikkei ended up 1.2% while the Hang Seng gained 1% and the Shanghai Composite ended 1.2% higher.
European shares continued to trade firm on hopes that global central banks would continue their stimulus measures to boost economy.
Among the major share indices in the region, CAC-40, DAX and FTSE-100 were up 1-1.7% each.
Back home, Union Finance Minister P Chidambaram today said that regardless of any government at the Centre the country will grow by 5-6%, but to reach the brisk rate of 8 or 9% effective governance is needed.
The BSE Oil and Gas index was the top gainer among the sectoral indices on the BSE up 1.6% followed by Auto, COnsumer Durables, Power, FMCG, IT and Realty indices.
Reliance Ind extended gains to end 1.8% up at Rs 843 after the company recently announced new gas find at KG D6 block.
ONGC gained 1.9% to end at Rs 333.
FMCG major ITC was among the top Sensex gainers which gained 1.8% to end at Rs 340.
Coal India gained 3% to end at Rs 323 after it reported better-than-expected 35% year-on-year (yoy) jump in its consolidated net profit at Rs 5,413 crore for the fourth quarter ended March 31, 2013 on back of higher than expected sales volumes.
Further, the board's decision to rationalise coal prices from May 28,2013 also boosted sentiment.
Bharti Airtel ended up 1.6% at Rs 314 on reports that the issue of spectrum refarming will be placed before the next meeting of Empowered Group of Ministers.
Other Sensex gainers include ICICI Bank, TCS, BHEL, M&M and Hero MotoCorp, all gaining between 1-5% each.
Among other shares, AstraZeneca Pharma India has dipped 16% to end at Rs 668 after its parent company has fixed the share sale price at Rs 490 per share. The floor price is 39% discount to Monday’s closing price of Rs 799 on BSE.
TV Today Network has dipped 9% to end at Rs 77 on reporting 13% year-on-year (yoy) drop in its standalone net profit at Rs 6.36 crore for the fourth quarter ended March 31, 2013 due to lower operational income.
Tata Chemicals ended 0.8% lower at Rs 304 after reporting a consolidated net loss of Rs 188 crore (Rs 1.88 billion) for the quarter ended March 31, 2013 (Q4) due to exceptional loss of Rs 515 crore (rs 5.15 billion).
Sun TV ended down 1.5% at Rs 411 ahead of its promoter stake sale plan vide offer-for-sale (OFS) tomorrow to meet the Sebi minimum public shareholding norms.
Infinite Computer Solutions ended in 10% upper at Rs 91 after announcing the buyback of its own equity shares from the public shareholders.
In the broader market, the BSE Mid-cap gained 0.6% and the Small-cap indices ended up 0.5%.
Markets breadth was positive with 1,204 gainers and 1,149 losers on the BSE.