The benchmark BSE Sensex recovered over 221 points in early trade on Monday as realty stocks led the rebound after market regulator Sebi approved new norms for setting up and listing of real estate and infrastructure investment trusts on Sunday.
Besides, positive cues from other Asian markets also buoyed the sentiments.
The 30-share barometer rose by 221.20 points, or 0.87%, to 25,550.34 with stocks of realty, auto, capital goods, banking and metal sectors, leading the recovery.
The gauge had lost almost 579 points in the past three sessions.
Similarly, the National Stock Exchange index Nifty regained the 7,600-mark by recovering 65 points, or 0.85%, to 7,633.55.
Brokers said fresh buying by funds and retail investors on expectations that the new norms for setting up of real estate and infrastructure investment trusts, approved by the market regulator Sebi, will help attract more foreign investors to these key sectors, buoyed the trading sentiments.
Positive cues from other Asian markets in line with weekend rally in the US markets on easing of tensions in Ukraine, too fuelled buying activity on the domestic bourses, they said.
The BSE realty sector index gained the most by rising 3.25% as stocks such as DLF Ltd, Phoenix Mills, India Bull Real Estate, Unitech, Sobha Developers, HDIL and DB Realty were trading up to 4.65% higher.
Among other Asian markets, Hong Kong's Hang Seng rose by 1.16%, while Japan's Nikkei moved up by 2.23% in early trade.
The US Dow Jones Industrial Average ended 1.13% higher on Friday.