Markets rebounded in late trades to snap a three-day losing streak after global rating agency Standard & Poor's upgraded India's credit outlook to 'stable' from 'negative'.
The 30-share Sensex ended up 158 points at 26,626 and the 50-share Nifty ended up 57 points at 7,969.
S&P earlier rated India as 'BBB-', the lowest in the investment grade, with a negative outlook.
The global rating agency revised outlook for India's credit rating back to "stable" from "negative," stating that the Modi-led NDA government's "strong" mandate would allow it to implement fiscal and economic reforms.
S&P cited India's external position and its improving current account balance as other positive factors for its credit rating.
The impact of the rating upgrade was the most on the Indian rupee which surged to Rs 61.11 to the US dollar against the previous close of Rs 61.34.
Asian shares ended mixed. Shares in Japan ended lower with the benchmark Nikkei ending 0.9% lower while Hang Seng fell 0.4% and Straits Times ended flat with positive bias.
However, the Shanghai Composite ended up 0.1%.
European shares were trading mixed as overnight losses on Wall Street dampened sentiment.CAC and DAX are up 0.2-0.6% each while FTSE-100 was trading flat with negative bias.
On the sectoral front, BSE Metal index was the top gainer up nearly 2.5% followed by Realty, Bankex, Healthcare, Oil and Gas, Auto and Capital Goods indices up 0.9-2% each.
In the Oil and Gas space, ONGC ended up 3% whereas RIL ended up 0.5%. Reliance Industries and ONGC which lost over 3% each yesterday after the government deferred its decision on gas pricing till November 15 have rebounded in today’s trade.
Sun Pharma ended up over 4% on hopes that the recent investigation carried
out by the USFDA would not lead to an import alert from the US drug regulator. Ranbaxy Labs ended up 5.5%.
Banks which are a proxy to the economy firmed up after the rating upgrade. Axis Bank, SBI and HDFC Bank and ICICI Bank ended up 0.8-3% each.
Metal shares which had fallen sharply in the previous sessions following the Supreme Court verdict have rebounded on the back of short covering and value buying at lower levels.
SAIL, Hindalco, Jindal Steel, NMDC, Tata Steel, JSW Steel, Sesa Sterlite and Coal India ended up 0.4-6% each.
Mahindra and Mahindra gained over 3% after the company launched its new Scorpio model while Tata Motors ended up 1.6%. However, Bajaj Auto, Hero Motocorp and Maruti Suzuki ended down 0.5-1.3% each.
L&T and NTPC were among the Sensex gainers.
On the flip side, cigarette maker and Index heavyweight ITC ended 1.2% lower on profit taking and its peer HUL has dipped nearly 1%.
IT majors Infosys and TCS have lost between 0.3-0.9% on profit taking. However, Wipro ended with marginal gains.
Other Sensex losers include, HDFC and Dr Reddy's Labs among others.
Among other shares, JSW Energy ended tad lower after the company said it will buy three hydropower projects of Jaiprakash Power Ventures Ltd (JPVL). However, JVPL ended up 9%.
Financial Technologies (India) gained 7% after the company said it concluded the renegotiation of technology supply agreement with Multi Commodity Exchange of India.
Mangalore Chemicals and Fertilisers ended up 20% after Deepak Fertilisers revised its offer price upwards to acquire stake in MCF. Deepak Fertilisers has revised its open offer to acquire additional 26% stake in MCF from Rs 63 per share to Rs 93.60 per share.
In the broader market, the BSE Mid-cap index ended up 0.8% and BSE Small-cap index ended up 0.7%.
Market breadth ended slightly higher with 1,532 advances and 1,418 declines on the BSE.