Markets closed in the positive zone, albeit off the day's high.
The Sensex opened in the red but managed to erase early losses on the back of buying in index pivotals. The index touched a high of 18,494 in afternoon trades.
However, it pared some gains and finally ended at 18,429 - up 188 points.
The Nifty ended at 5,527 - up 55 points.
Global markets were up as well. European stocks recoveed from initial lows as miners and car makers posted some of the strongest gains, while bank stocks mostly fell.
FTSE and CAC were up marginally at 5,701 and 3,795, respectively. DAX remained in the negative zone.
Asian bourses ended in red. Nikkei shed 1%, while Hang Seng and Seoul Composite dropped 0.5% each.
ONGC and oil marketing companies rallied after government raised fuel prices.
On Friday after market hours Empowered Group of Ministers decided to take a bold step of raising diesel prices by Rs 3 per litre, kerosene by Rs 2 per litre and cooking gas by Rs 50 per cylinder which may boost oil market companies.
However, fuel price hike may further stoke inflation and prompt the Reserve Bank of India to continue with its tightening regime.
Analysts said this development will weigh on the markets going forward.
The market is likely to be choppy in the next few days as traders roll over positions in the derivatives segment on Thursday.
"Taking a slightly longer term view, one can say that we are in a downtrend which started when the market peaked in November last year.
"This downtrend is still very much intact. It is quite possible that the Nifty will break 5000 and move lower.
"Nevertheless, this downtrend does not seem to be as bad a bear market as the one in 2008, when the broad market lost about 65% from peak valuations, and many stocks lost more than 75-80%, " said Hormuz Maloo, Technical Analyst, Geojit BNP Paribas BSE PSU, Oil & gas, bankex and auto indices gained 1-2% each in trades.
HPCL was the biggest gainer in the oil & gas space. The stocks jumped 5.8%, followed by Oil India and BPCL. ONGC added 4% to Rs 285. Indian Oil and Gail were also in green.
Among banking stocks, private players Yes Bank, Federal Bank, Axis Bank - moved up 2-5% each. Bank of Baroda, Union Bank, Canara Bank and IDBI Bank were also in the green. Sensex stocks - SBI, HDFC Bank and ICICI Bank advanced 1.5% each.
Mahindra & Mahindra was the biggst gainer among auto stocks and moved up 3% to Rs 693. Maruti Suzuki added 2.8% to Rs 1,153. Ashok Leyland, Exide Industries and Bharat Forge added 2% each.
Punj Lloyd moved up 1.7% to Rs 67 after the company said the group has received a letter of award from Gujarat State Petroleum Corporation, for a submarine pipeline project in an exploration block on east coast of India.
HCC gained 2% at Rs 30.15 after the company said that Alstom-HCC JV, a joint venture between the company and Alstom Hydro Finance has bagged EPC contact for construction of Tehri Pumped Storage Plant in Tehri, Uttarakhand by THDC India.
SpiceJet advanced 4% to Rs 34, extending Friday's 20% surge triggered by reports the company has sought Reserve Bank of India's nod to raise funds from Canada's export finance agency for financing fleet expansion.
Among other aviation stocks -- Jet Airways gained 3% to Rs 434 while Kingfisher ended flat.
However, weakness was witnessed in realty and FMCG stocks as both indices fell around 0.5% each.
HDIL, Ackruti City, D B Realty and Phoenix Mills slipped 1% each.
ITC and HUL, among FMCG stocks were down marginally. Wipro slipped 0.3% at Rs 422. Reliance Infrastructure was down 1.5% at Rs 523.
Market heavyweight, Reliance ended flat at Rs 872.
BSE market breadth was fairly positive.
Out of 2,945 stocks traded, 1,634 advanced while 1,194 declined.
