The benchmark Sensex on Monday extended its gains for the third straight session, rising 127 points to end at one-week high on fag-end buying in capital goods, FMCG and IT shares ahead of retail inflation and IIP data releases.
The NSE Nifty index reclaimed the 8,300-mark by rising 38.50 points, or 0.46%, to end at 8,323.
After staying in red for most part of the session, the broader indices gained pace in the last one and a half hours.
The BSE Sensex resumed higher at 27,523.86 on initial buying but fell to a low of 27,323.74 on profit-booking.
However, the index recovered during the afternoon session session to 27,620.66 on fag-end buying before concluding at 27,585.27, logging a gain of 126.89 points or 0.46% from its last weekend's level. This is its strongest close since 27,842.32 on January 5. In three successive days, Sensex has gained over 676 points.
All eyes are now on November IIP data and December retail inflation, to be released later on Monday.
"Markets rose with the expectations that the economy may come out of the contraction in industrial activity as depicted by October's IIP data," said Bonanza Portfolio, senior vice president, Rakesh Goyal.
Major Sensex gainers included Infosys, L&T, HDFC, ICICI Bank and HUL, while Reliance Industries, HDFC Bank and Coal India were among the notable laggards.
Meanwhile, provisional data showed that foreigners sold shares worth a net Rs 297.99 crore on last Friday.
Most Asian stocks ended lower amid concern that Europe's stimulus plans may not solve the euro region's economic woes.
Key indices in Hong Kong and Singapore moved up by 0.19% to 0.45% while indices in China, South Korea and Taiwan dropped by 0.19% to 1.71%.
The Japanese market remained closed today. European markets were trading narrowly mixed as indices in Germany and the UK declined by 0.10% to 0.51% while France's CAC was quoting 0.48% up.
US stocks fell on last Friday following a two-day rally as December's jobs report gave a mixed view of the economy.
Back home, 15 scrips out of the 30-share Sensex pack ended higher while the rest declined.
Major gainers were HUL 3.84%, L&T 2.29%, Infoys 1.98%, HDFC 1.57%, ICICI Bank 1.27%, BHEL 1.26%, SBI 1.24%, Axis Bank 1.24% and Dr Reddy's 1.21%.
However, Coal India dropped by 4.54%, followed by Hindalco 2.55%, Bajaj Auto 2.03%, Bharti Airtel 1.92%, Hero MotoCorp 1.90%, Gail India 1.16% and Reliance Industries 1.15%.
Among the S&P BSE sectorial indices, Capital Goods rose by 1.55%, followed by FMCG 1.42%, IT 1.32% and Bankex 0.90% while Metal fell by 1.68% and Oil&Gas dropped by 1.19%.
Total market breadth continued to remain positive as 1,651 stocks ended with gainers while 1,253 finished with losses and 120 ruled steady. The total turnover on Monday fell to Rs 3,019.46 crore from Rs 3,284.91 crore last Friday.