The benchmark indices ended higher in trades on Tuesday led by gains in oil and gas shares after global crude oil prices slumped to 16-month low on slack demand due to fears about the slowing the euro zone economy ahead of Spanish bond sales.
Buying interest in FMCG major ITC also boosted market sentiment.
The 30-share Sensex closed at 16,860, up 154 points and the 50-share Nifty jumped 40 points to provisionally end at 5,104 levels. For the most part of the day, the markets traded on a flat note.
European shares and the euro inched higher on Tuesday but the gains were likely to be limited because investors are worried about Spain's financial problems ahead of two debt auctions.
Spain is expected to pay record high rates for short-term bills later in the day and at a sale of longer-term bonds on Thursday, heightening fears the government will soon need international help. Most of European markets were trading higher.
The CAC 40 index was down by a point at 3,064.
However, DAX and FTSE were trading higher by 0.5 and 0.9% each respectively.
Japan's Nikkei share average retreated on Tuesday from the previous day's four-week high as the initially positive reception for Greece's election result was chilled by concerns about Spain's banking sector.
The Nikkei, Hang Seng, Taiwan and Shanghai ended lower between 0.1-1%.
Back home, Gail (India) was the top gainer among the Sensex stocks, up nearly 3% to close at Rs 336. Index heavyweight Reliance Industries also jumped 2.6% to end at Rs 737. ITC registered its lifetime high levels in trades today. It advanced 2.5% to end at Rs 249.
Bharti Airtel, ONGC, Cipla, Coal India, TCS, ICICI Bank, Sun Pharma, Wipro and Larsen &
On the other hand, Sterlite Industries, BHEL, Infosys, Tata Power, Jindal Steel, Bajaj Auto and Maruti Suzuki were among the laggards, down 0.3-1.6% each.
On the sectoral front, all the indices barring the IT index ended higher.
The BSE oil & gas index jumped 2.15% or 166 points to end at 7,921 levels.
The rally in these stocks was led by oil marketing companies (OMC). Shares of OMCs such as Hindustan Petroleum Corporation (HPCL), Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) rallied 3-7% each on expectation of partial decontrol in diesel price and increase of regulated products price.
FMCG stocks are also witnessed buying in trades today. The BSE FMCG index advanced 1.6% or 75 points to 4,832 levels. Nestle, Godrej Consumer Products, Dabur and Hindustan Unilever were the top gainers from this space.
Healthcare, capital goods, bankex, consumer durables, realty, auto and metal indices also advanced 0.2-0.7% each.
Among the individual stocks, Shares of Reliance Communications (RCom) dipped 2.5% to Rs 63, on reports that equity research firm Veritas has downgraded the stock to sell with the target price of Rs 15.
Venus Remedies moved higher by 7.6% to end at Rs 225, surging 38% in past six trading sessions after the company received patent from the US Patent Office for new antibiotic product CSE 1034, which targets drug resistant infections.
The broader markets ended on a listless note. The BSE mid-cap index advanced 0.2% to end at 5,905 levels and the small-cap index ended flat at 6,440 levels.
The overall breadth was neutral as 1,350 stocks advanced while 1,321 stocks declined.
