Erasing early losses, the BSE Sensex gained 149 points to reach 3-week high of 16,862.81 on Tuesday as investors bought blue chips such as RIL and Infosys at low levels amid a smart rebound in European markets.
Following weak Asian markets, the Bombay Stock Exchange 30-share barometer opened weak and dropped to a low of 16,488.30, down 225 points.
However, higher openings in European markets and buying at lower levels in heavyweights such as Reliance Industries Ltd and Infosys helped Sensex bounce back to over 3-week high of 16,862.81, up of 149.48 points or 0.89%. On Monday, it had fallen by over 108 points or 0.64%.
RIL and infosys, which carry over 20% weight in the Sensex, gained 4.05% and 1.75%. RIL alone added more than 65 points to the gain.
Other key stocks such as M&M, L&T, ICICI Bank, ONGC, BHEL, HDFC and HDFC Banks made moderate to good gains.
The broader NSE 50-issue Nifty also recouped 47.10 points or 0.94% to 5,064.30.
European markets were firm in afternoon trade. UK's FTSE 100, Germany's DAX 30 and France's CAC 40 indices were up between 0.75% and 1.5%.
"The news of the Swiss National Bank (SNB) to set a floor price for the euro/swiss franc exchange rate to control the rising franc, boosted European stocks, which ultimately helped to change the track in the oversold domestic markets," said CNI Research CMD Kishor P Ostwal.
As for Asia, key indices in Hong Kong and Singapore closed in the green, while China, Japan, South Korea and Taiwan ended in the red.
Back home, FIIs continued the buying spree and purchased shares worth Rs 212 crore yesterday as per Sebi data.
Meanwhile, Senior Research analyst at Bonanza Portfolio Shanu Goel said, "The new land acquisition bill was passed yesterday and as acquisition costs (suggested therein) were deemed to be high for the builders, realty companies suffered the worst loss."
The BSE-Realty index dipped 2.04%, as DLF lost 4.43%.
In all, 19 of the 30 Sensex-based counters closed with gains, while 10 ended with losses. ITC remained unchanged. M&M was up 3.31%), Jaipra Asso (2.79%), Jindal Steel (2.38%), Sterlite Ind (2.21%), BHEL (2.11%), Infosys Tech (1.75%), Maruti Suzuki (1.71%), ONGC (1.60%), Tata Motors (1.59%), Hindalco (1.27%), L&T (1.24%), ICICI Bank (0.82%) and HDFC (0.71%).
However, DLF dropped 4.43% and was the top loser from the Sensex pack, followed by Sun Pharma (2.40%), Bharti Airtel (1.81%), Bajaj Auto (1.49%) and SBI (1%).
Sectorally, BSE-Oil&Gas index rose by 2.78%, IT (1.16%), Consumer Goods (1.09%) and Auto (0.96%).
The total market breadth remained positive as 1,633 stocks settled in the green, while 1,169 concluded in the red. The total turnover improved to Rs 3,082.24 crore from Rs 2,549.87 crore on Monday.