The benchmark BSE Sensex on Tuesday partially recovered to close 169 points higher on revival of buying by funds along with short-covering by speculators in heavy-weight stocks.
The Sensex, which recorded its second biggest fall of 617 points yesterday in reaction to Reserve Bank's move to squeeze liquidity, rose 169.21 points, or 1.36 per cent at 12,624.58 points mostly on the back of comeback by capital goods, PSU, IT and oil and gas sector stocks.
Similarly, the wide-based National Stock Exchange index Nifty gained 57.05 points, or 1.56 per cent, to 3,690.65 after moving between 3,703.05 and 3,632.20 points.
Market observers said apart from revival of buying by funds, covering up of short positions by speculators also helped stocks to stage comeback.
With renewed interest in PSU stocks led by BHEL, the PSU index was best performer among key indices and ended 122.30 points up at 5,796.78. The BSE capital goods index recovered 96.71 at 8,718.079, Oil and Gas index by 114.96 points at 6,287.21, while IT index rose by 94.41 points at 4,766.97.