A stellar rally in IT and pharma stocks was seen owing to a weak rupee and defensive buying amid volatility.
Markets finished the session on a firm note, amid choppy trades, after a rebound in Chinese shares following news that the central bank would infuse more capital and replenish liquidity in the banking system in the aftermath of the yuan devaluation.
Further, the rebound in the rupee also aided sentiment.
The Sensex closed 100 points higher at 27,932 levels and the Nifty gained 29 points to end at 8,495.
In the broader markets, the BSE Mid-cap and Small-cap indices added 0.1% and 0.2%, respectively.
The market breadth ended firm with 1,469 advances as against 1,389 declines. A stellar rally in the technology and healthcare stocks was seen owing to a weak rupee and defensive buying amid volatility.
Market view
"Nifty is in a range of 8350 to 8550, and the range has been narrowing since last few days. I believe a decisive trend can begin only once we see a brkout or a breakdown of these two key levels.
The midcaps have been on a roll, and a lot of Midcap stocks still witnessing good traction.
I believe that the approach should be stock specific and avoid Index trades, at current juncture" said Kunal Bothra, Head-Advisory, LKP Securities.
Rupee
The Indian rupee recovered by 11 paise to 65.20 per dollar after on fresh selling of dollars by banks and exporters amid gains in the local equities.
Stock trends
On the sectoral front, barring BSE Metal, Bankex and Metal indices all other indices ended in green with BSE Healthcare index surging over 2.6%.
Export oriented stocks including healthcare and IT gained across the exchange on weakening of rupee over the past sessions.
Sun Pharma, Wipro, Cipla, Lupin and Infosys gained between 1-4%.
Cipla gained 1.6% after HSBC added the stock to EM model portfolio in place of Saudi International Petrochemical. Sun Pharma emerged as the top gainer and surged over 4% after BofA-ML upgraded the stock to "buy" from "neutral".
Infosys climbed nearly 1% after the company announced that it has received an order from Fidelity Bank Plc., Nigeria. Delhi-based developers gained on reports that construction norms may ease around Noida. Jaiprakash Associates surges, Jaypee Infratech , Unitech and Puravankara Projects climbed between 0.5-10%.
Telecom shares ended weak lower after a news report said Reliance Jio is set to launch 4G-enabled handsets in the second week of September.
Bharti Airtel , RCom and Tata Communications ended down between 0.1-1%.
Reliance Industries gained nearly 1% after reports suggest that Reliance Jio Infocomm is set to launch 4G-enabled handsets in the second week of September, ahead of the formal launch of its 4G services.
Shares of public sector undertakings (PSU) banks ended lower on profit booking after these stocks rallied by up to 20% in the past four trading sessions.
State Bank of India (SBI), Allahabad Bank, Canara Bank, Bank of Baroda, Union Bank of India, Andhra Bank, Punjab National Bank and Indian Overseas Bank lost between 2-5%.
Glenmark Pharmaceuticals advanced 3% after the company said it has received final approval from the US drug regulator for drospirenone and ethinyl estradiol tablets.
Amtek Auto tanked 30% after the exchange decided on Tuesday to remove the stock from F&O segment with effect from October 30, 2015.
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