After touching an intra-day high of 18,457, the Sensex eventually shed a few points to close the day at 18,438, up 227 points from its previous close, supported by a strong rally in the IT and Teck spaces.
Today's recovery comes as a relief after last Friday's fall of 295 points, wherein the Sensex closed at 18,212.
The Nifty also extended gains at 5,519 up 60 points from its previous close.
Deepak Singh Tanwar, Sound Equity & Consulting, while commenting on the market said, "As long as the 5,350 level is not broken, the outlook for the market should be considered positive.
On the upper side, the Nifty has resistance around 5,600."
A consensus on the 2G scam JPC, along with a robust GDP projection of nearly 9% for the coming fiscal by C Rangarajan, Chairman of the PM's Economic Advisory Council, buoyed investor sentiment, with markets covering most of their losses incurred on February 18.
Gainers on the Sensex were TCS at Rs 1,137 and Wipro at Rs 450, both up by a handsome 4%, while Sterlite Industries at Rs 166 gained 3%.
Auto stocks were the major losers on the BSE benchmark today; Tata Motors at Rs 1,162 was down 3%, Hero Honda at Rs 1,439 slipped 2% and Maruti Suzuki closed down 1% at Rs 1,213.
The IT index led the sectoral pack at 6,400 up nearly 3%, followed by the Consumer Durables index at 5,832 and the Oil & Gas index at 9,499, both up 2%.
Major gainers in the IT space were Mphasis at Rs 681, TCS at Rs 1,137 and Wipro at Rs 450, all up 4%.
Mid-cap and small-cap stocks underperformed the benchmark stocks. The Mid-cap index closed at 6,659, while the Small-cap ended at 8,121, both flat with a negative bias.
Looking at the markets over the day, after a flat opening this morning, the bourses turned choppy within early hours of trade. "The trend deciding level for the day is 18,354/5,500 levels", said Angel Broking.
On February 18, the last working day for the markets last week, the Sensex closed down 295 points at 18,202, and the Nifty shut shop down 88 points at 5,459.
However, owing to a pre-budget sentiment buffering, the markets opened on a positive note this morning, with Budget-related
positive news flow and softening inflation eased investors' nervousness.
The Indian equity markets, down 11% so far this year, and amongst the worst performing market after Egypt, saw an outflow of $1.65 billion on the back of unhealthy political headwinds, and a deepening telecom spectrum scam.
Dull trades constituted mid-morning sessions as the BSE benchmark Sensex remained unchanged, while the Nifty remained flat.
The BSE Capital Goods, Consumer Durables and FMCG indices were amongst the top sectoral performers, while the Auto index languished at the bottom of the sectoral chart.
Realty and banking stocks also saw selling pressure, and were amongst the sectoral losers.
Noon trades continued to witness weak trades, with the Auto index continuing its negative run as the top sectoral loser, while the broader markets traded in negative territory in the absence of any positive cues from the government regarding the Union Budget, or the 2G fiasco.
However, afternoon trades experienced some major movements, as the Sensex shed 108 points at 18,102, while the Nifty was trading lower by 37 points at 5,421 at 1330 hours.
Auto heavyweights Tata Motors, Hero Honda, M&M and Maruti Suzuki pulled down the index amidst concerns the forthcoming Budget may propose a hike in excise duties.
On the volatile market scenario, Samir Arora, Helios Capital, said, "I do not know how much will the upside be, but basically it cannot be the pace that the rest of the world is rallying and we are down 15-18%. What we saw two weeks ago, this kind of disjoint between the two markets like US and India will not be seen."
The market breadth was negative, with 1,395 advances, versus 1,465 declines.