Stock markets surged by over 500 points in early trade on Tuesday after another pep talk by Finance Minister P Chidambaram but pared most of the gains before closing the day with a gain of over 174 points.
The Bombay Stock Exchange's 30-share Sensex settled the day at 11,483.40 points, higher by 174.31 points, or 1.54 per cent, than its previous close.
National Stock Exchange index Nifty also ended higher by 27.95 points at 3,518.65.
Marketmen said shares rose in tandem with the rally in Asian and European bourses. Japanese benchmark index Nikkei jumped 14 per cent as the rescue plans worth over one trillion dollars mooted by various European countries boosted market sentiments.
Stellar gains in American bourses overnight which saw the key Dow Jones Industrial Average Index jumping over 900 points also bolstered the shares in Asia and Europe, they said.
On BSE, IT scrips gained the most by 149.45 points at 2,939.87. Infosys Technologies shot up by Rs 77.40 at Rs 1397.05, Satyam Computer rose by Rs 19.85 at Rs 289.
Banking index also posted a gain of 64.23 points at 6,038.07. Much talked and battered ICICI Bank added Rs 22 at Rs 447.10. RBI remarks that it would hold an extra 14-day money auction today to help banks meet the cash requirements of mutual funds boosted sentiments on banking shares.