Benchmark stock indices Sensex and Nifty ended higher on Wednesday after three days of decline, tracking a rally in global markets.
Buying in blue-chips Reliance Industries and HDFC Bank also added optimism to markets recovery.
The 30-share BSE Sensex climbed 260.74 points, or 0.32 per cent, to settle at 80,998.25.
During the day, jumped 349.78 points, or 0.43 per cent, to 81,087.29.
The NSE Nifty went up 77.70 points, or 0.32 per cent, to 24,620.20.
From the Sensex firms, Eternal climbed 3.32 per cent. Bharti Airtel, IndusInd Bank, Tech Mahindra, Reliance Industries, Tata Motors, HDFC Bank, Tata Steel and Hindustan Unilever were the other major gainers.
However, Bajaj Finserv, Axis Bank, Tata Consultancy Services, Titan and Larsen & Toubro were among the laggards.
"The domestic market traded in a narrow range with a mildly positive bias, supported by favourable global cues such as strong US job data and signs of easing US-China trade tensions," Vinod Nair, head of research, Geojit Investments Ltd, said.
"Mid and small-cap stocks outperformed, driven by better-than-estimated earnings growth and moderation in valuation. Investors are now focused on the RBI policy meeting starting today, with expectations of a rate cut and clarity on the future growth & inflation forecast," Nair said.
In the Asian markets, South Korea's Kospi jumped sharply. Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng also settled higher.
US markets ended in the positive territory on Tuesday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,853.83 crore on Tuesday, according to exchange data.
Global oil benchmark Brent crude climbed 0.38 per cent to $65.92 a barrel.