The Bombay Stock Exchange benchmark Sensex gained over 134 points in the opening trade on Wednesday due to buying of funds on firm global markets amid covering up of short positions by speculators ahead of Thursday's expiry in the derivatives segment.
The 30-share barometer gained 134.02 points to 8,956.08 with the banking, realty and metal sector stocks leading the recovery. The index had lost nearly 220 points in the previous two sessions.
The broad-based National Stock Exchange Nifty also moved up by 35.80 points to 2,769.70.
Stock brokers said apart from short-covering by speculators in view of tomorrow's monthly expiry in the derivatives segment, fresh buying by funds driven by overnight rally on the US markets and firming trend in other regional bourses, helped sentiments improve to some extent.
They said the market also got a boost after the government yesterday announced that the 4 per cent across-the-board excise duty cut would continue beyond March 31, 2009, and also reduced excise duty rates by two per cent to bring it down to 8 per cent. Among banking stocks, the country's largest lender SBI traded 2.30 per cent higher at Rs 1,051.95, ICICI Bank by 3.25 per cent to Rs 346.40, HDFC Bank by 1.18 per cent to Rs 867.
Other gainers, which also supported the Sensex, were Reliance Industries 1.97 per cent climb to Rs 1,277.95, Reliance Infra by 3.61 per cent to Rs 506.80 and Reliance Communication by 2.19 per cent to Rs 160.85.
Besides, Tata Steel by 2.55 per cent to Rs 164.65, Sterlite Industries by 0.08 per cent to Rs 244, Larsen and Toubro by 2.04 per cent to Rs 638.2, ACC by 0.92 per cent to Rs 563.95, Grasim Industries by 2.34 per cent to Rs 1,417 and Infosys by 1.43 per cent to Rs 1,201.05.
Stock of realty giant DLF Ltd was up 2.38 per cent to Rs 168.10.
Meanwhile, the US Dow Jones Industrial Average ended 3.90 per cent higher, while Hong Kong's Hang Seng gained 2.49 per cent in early trade on Wednesday.