The Sensex closed higher by 30 points at 18,339 and the 50-share Nifty slipped 3 points to close at 5,571.
The Sensex moved in a range of 130 points while the Nifty moved in a range of 43 points.
The Asian Markets ended on a positive note in trades today as investors were encouraged by an improving outlook for talks to resolve an imminent fiscal crunch in the United States.
US lawmakers expressed confidence on Sunday that they could reach a deal to avert the $600 billion "fiscal cliff", which threatened to send the giant economy back into recession.
Hang Seng advanced 103 points to 21,262, Nikkei advanced 129 points to close at 9,153, Straits Times advanced 11 points to 2,956, Seoul Composite jumped 17 points to 1,878 and the Snaghai Composite closed higher by 2 points at 2,016.
The European markets were trading mixed with DAX and FTSE marginally down and the CAC-40 trading higher by 0.1%.
Back home, most of the Sensex stocks faced the heat of a mild selling pressure.
Tata Power is was the top Sensex loser, down 2.4% at Rs 97. Tata Steel, TCS, HDFC, Reliance Industries, GAIL India, Sterlite Industries, Hindalco, HUL, Wipro, Larsen & Toubro, Dr Reddy's Labs, State Bank of India, ICICI Bank, BHEL and Tata Motors also ended on a weak note.
Auto shares were among the top gainers on hopes that the demand pick up during the festival sales would boost sales growth during the current month.
According to brokerage reports, Maruti has large pending orders for Maruti Swift Dzire while Mahindra & Mahindra has huge pending orders for its sports utility vehicle XUV 500. Maruti Suzuki, Mahindra & Mahindra, Bajaj Auto and Hero MotoCorp ended up 1.8-3.6% each.
Telecom major Bharti Airtel extended gains and ended up 3.3% after the government failed to attract bidders during the 2G
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