Markets recouped intra-day losses to end higher, amid firm global cues, led by select index heavyweights and capital goods shares.
The S&P BSE Sensex gained 84 points to close at 25,773 and the Nifty50 edged 22 points higher to settle at 7,888. In the broader markets, the BSE Midcap and Smallcap indices ended with marginal gains.
However, market breadth ended negative with 1315 losers and 1298 gainers on the BSE.
"Markets are likely to remain volatile and trade in a narrow range. There is a combination of short covering and positive global cues while good results are getting rewarded," said Mayuresh Joshi, Fund Manager, Angel Broking.
Foreign portfolio investors were net buyers in equities worth Rs 224 crore on Monday, as per provisional stock exchange data.
Dr Reddy’s Labs emerged as the top Sensex gainer to end 3% higher ahead of its fourth quarter and FY16 results due on Thursday.
FMCG major Hindustan Unilever ended nearly 2% higher after weak commodity prices lowered input costs leading to expansion in margins in the March quarter.
Capital goods majors BHEL and L&T each settled 1.5%-2% higher ahead of the IIP numbers due to be released on Thursday.
Infosys Foundation, philanthropic arm of the IT major, has signed a pact with Indian Institute of Science Education and Research (IISER), Pune, to support students from economically weaker section to pursue 'high quality' education. Shares of Infosys ended up 1.4%.
Other Sensex gainers include, Axis Bank, HDFC and ICICI Bank among others.
Tata Motors was the top Sensex loser to end 3% lower after its retail sales in April moderated.
Metal shares weakened after the iron ore traffic, including pellets, at major ports saw a sharp fall of 28% in financial year 2015-16 as imports declined because of weak demand.
Total iron ore cargo fell to 13 million tonnes (mt) from 18 mt a year ago. Hindalco ended down 1.9% while Tata Steel eased 0.4%.
Oil explorers eased tracking weakness in global crude oil prices.ONGC, Cairn India and Oil India ended down 1.6%-3% each.
Among other shares, Ujjivan Financial Services which made its debut on the bourses today ended at Rs 233, a 10% premium against its issue price of Rs 210 per share.
Crompton Greaves gained nearly 2% after the company on Monday said it has signed a share purchase agreement with First Reserve International, a US private equity fund, for its power businesses in Europe, North America and Indonesia for an enterprise value of 115 million euros (about Rs 851 crore).
JSW Steel closed over 3% lower. JSW Steel is one of seven bidders that Tata Steel has selected for the next stage of the sales process of its UK operations, the Financial Times reported on Tuesday.
Datamatics Global Services ended nearly 5% higher after the company said it has won a automatic fare collection contract for the North-South corridor (Phase 1A) of the Lucknow Metro Rail project.