Firm opening of the European markets has also cheered the sentiments among local investors.
The Sensex ended at 19,041 -- up 176 points -- closing above the 19K mark after two weeks. Nifty ended up 44 points at 5,748.
Meanwhile, Japan's Nikkei average fell 1.1% to a nearly four-week low with exporters leading the decline after weak US factory data overnight stoked concern about growth prospects for the world's biggest economy.
Gains in real estate firms, however, helped pare back steep losses on expectations that the Bank of Japan will ease monetary conditions further at its policy meeting this week.
European shares rose and the euro edged away from a four-month low on Tuesday but gains were limited as investors awaited data on the region's factory output and remained concerned about consequences of the Cyprus bailout.
Euro zone manufacturing activity indexes for March, due later, are expected to add to concerns about the fragile global economic recovery revealed in weaker than expected data from China and the United States on Monday.
Foreign institutional investors bought shares worth a net Rs 313.07 crore on Monday, 1 April 2013, as per provisional data from the stock exchanges.
The index of eight core industries fell 2.5% in February 2013 compared to their 7.7% growth in February 2012, data released by the government Monday.
Market Economics will unveil the result of a monthly survey on the performance of India's services sector for March 2013 tomorrow, 3 April 2013.
All eyes will be towards the PMI data for direction, ahead of the Q4 results season which is set to begin on April 12, 2013 with Infosys.
On the sectoral front, BSE Metal index surged by 2% followed by counters like oil & gas, capital goods, healthcare, PSU, Consumer Durable, Power, Realty, Banks and IT, all gaining by 1% each.
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