Equity benchmark indices Sensex and Nifty bounced back to end with remarkable gains despite starting on a weak note on Tuesday driven by a buying rush in services and telecom shares amid optimism on a US-India trade deal.
The 30-share BSE Sensex began the trade on a negative note by declining 411.32 points or 0.49 per cent to 83,124.03. The 50-share NSE Nifty dropped 125.1 points, or 0.48 per cent to 25,449.25 in the early trade.
However, both the benchmark indices made a strong comeback and closed the session with significant gains.
The Sensex jumped 335.97 points, or 0.40 per cent, to settle at 83,871.32, while the Nifty climbed 120.60 points, or 0.47 per cent, to close at 25,694.95.
"The domestic market opened on a subdued note amid concerns over potential implications of the Delhi explosion. However, it recovered smartly and closed at the day's high, supported by global cues as the US Senate passed a bill to end the longest-ever federal shutdown.
"Importantly, the Q2 results season is nearing its end and is expected to conclude on a positive note, driven by better-than-expected performance by the broader market. The rally was sustained by gains in IT, auto, metal, and FMCG sectors," Vinod Nair, Head of Research, Geojit Investments Ltd, said.
Among the Sensex firms, Bharat Electronics Ltd, Mahindra & Mahindra, Adani Ports, HCL Technologies, Eternal, Infosys, Bharti Airtel, Sun Pharmaceuticals, Larsen & Toubro, Hindustan Unilever and UltraTech Cement were the gainers.
Bajaj Finance, Tata Motors Passenger Vehicles, Kotak Mahindra Bank, PowerGrid and Tata Steel were among the laggards.
Bajaj Finance ended over 7 per cent lower as investors turned cautious after the company's lower Assets Under Management (AUM) growth guidance and rising signs of asset stress. Bajaj Finserv fell 6.26 per cent.
"Investors are now awaiting the upcoming domestic inflation data, with expectations of continued moderation due to a steady decline in food prices -- raising prospects of further policy easing by the RBI. Looking ahead, earnings are expected to witness a robust rebound in the third quarter, underpinned by multiple domestic tailwinds, though much will depend on the successful finalization of a trade deal with the US," Nair said.
President Donald Trump announced on Monday that the US will soon reduce the tariffs imposed on India, as the two nations moved closer to finalising a trade deal.
Meanwhile in Asian markets, South Korea's Kospi, Hong Kong's Hang Seng, and Japan's Nikkei 225 index settled higher while Shanghai's SSE Composite index closed in the red territory.
Markets in Europe were trading higher. The US markets ended higher on Monday.
Brent crude, the global oil benchmark, increased by 0.33 per cent to USD 64.27 per barrel.
Foreign Institutional Investors offloaded equities worth Rs 4,114.85 crore on Monday while Domestic Institutional Investors remained the net buyer of stocks worth Rs 5,805.26 crore, according to the exchange data.
On Monday, the 30-share BSE Sensex benchmark climbed 319.07 points to close at 83,535.35. The 50-share NSE Nifty advanced 82.05 points to settle at 25,574.35.