A fag-end recovery in key frontline heavyweights Thursday led to a positive close for Indian markets after a day's breather with the benchmark Sensex gaining 68.22 points to end at 29,448.95.
The NSE barometer CNX Nifty also edged up by 15.10 points, or 0.17%, to settle at 8,937.75.
Healthcare, banking, auto, FMCG and power related stocks spearheaded the recovery.
They were well supported by gains in small and mid cap stocks.
However, continued profit-taking in counters like metal, capital goods, IT, and consumer durables capped gains. It was a lacklustre session for the markets generally after Wednesday's 213-point drop in the Sensex.
The surprise rate cut had powered the index to top 30K for the first time in its history but profit-booking played spoilsport.
The Sensex resumed marginally up at 29,436.77 and hovered between 29,518.32 and 29,162.47 before finishing at 29,448.95, disclosing a gain of 68.22 points, or 0.23%.
"With most market fears taming down and the continuance of FII flows towards Indian markets suggest that current market valuations are here to stay," said Bonanza Portfolio, Associate Fund Manager, Hiren Dhakan.
Markets spent most of the trading session in red on the back of listless trading before rebounding towards the fag-end.
Moreover, passing of the long-pending Insurance bill, a key economic reform legislation providing for raising foreign investment cap to 49% and Coal Bill in the Lok Sabha late on Wednesday also helped investors regain confidence.
Still, caution was abound and traders preferred to lighten their long positions ahead of a long weekend.
Bourses will remain closed on Friday in view of Holi.
In a major boost to country's sovereign outlook, Moody's on Thursday said the new 'inflation targeting' mechanism is a "credit positive" move and would make RBI's monetary policy tools much more effective.
Foreign Portfolio Investors bought shares worth a net Rs 2786.24 crore on Wednesday according to provisional data.
Elsewhere in Asia, barring Japan's Nikkei, most equity indices finished lower after China lowered its GDP growth target to 7% - its lowest level in 11 years.
On the other hand, European stocks were higher in early trade ahead of the European Central Bank's monthly policy meeting later in the day.