Fag-end buying on Monday pushed up the BSE benchmark Sensex sharply by 227 points to close at 18,438.31, as investors bought strong stocks at cheaper levels led by IT sector, amid funds buying to cover their pending positions ahead of settlement in the derivatives sector.
The Bombay Stock Exchange benchmark Sensex, which touched the day's low of 18,082.66, bounced back sharply in last 30 minutes of trading to close higher by 226.79 points at 18,438.31.
The broad-based National Stock Exchange index Nifty, after falling to 5,413.10 points, closed at 5,518.60 with a handsome gain of 59.65 points.
Brokers said trading sentiment was bolstered after Credit Suisse Group upgraded Wipro and State Bank of India reportedly saying that net interest margins may rise.
Wipro, India's third-largest software services provider, surged the most since November 22 by rising 4.12 per cent to Rs 450.25 after Credit Suisse raised it rating to "outperform" from "neutral".
Overall, IT stocks move up on a rebound in the European region, a major centre for technology business.
Major market players were buying stocks to wind up their pending long positions ahead of the expiry of current month settlement in the derivatives segment on Thursday.
The most-heaviest Reliance Industries rose by 2.04 per cent to Rs 956.50 and second heavy Infosys Technologies by 2.09 per cent to Rs 3,161.20. The two carry nearly 23 per cent weightage on the index.
In the 30-BSE index components, 20 stocks closed with gains and barring auto, all the sectoral indices remained higher.
The upsurge was partly checked by auto stocks as, led by Tata Motors, they fell on fears that hike in interest rates might hamper the sales. The auto sector index fell by 1.18 per cent to 8,614.90.
Tata Motors, owner of Jaguar Land Rover, slid 3.33 per cent to Rs 1,161.95. Hero Honda Motors, the biggest motorcycle maker, dropped 1.66 per cent to Rs 1,439.35. Maruti Suzuki fell by 1.31 per cent to Rs 1,212.65.
As the bargain buying prevailed on the market, investors pulled out funds from low value stocks to front runners. As a result, smallcap index fell by 0.09 per cent to 8,121.26 and midcap index by 0.04 per cent to 6,659.18.