Benchmark stock indices Sensex and Nifty rebounded nearly 2 per cent on Tuesday in line with a recovery in Asian peers after US President Donald Trump delayed tariffs on Mexico and Canada for a month.

The 30-share BSE Sensex jumped 1,397.07 points or 1.81 per cent to settle at a month's high of 78,583.81. During the day, it surged 1,471.85 points or 1.90 per cent to 78,658.59.

The NSE Nifty soared 378.20 points or 1.62 per cent to 23,739.25, a level not seen since January 3.

From the 30-share blue-chip pack, Larsen & Toubro rallied nearly 5 per cent. Adani Ports, IndusInd Bank, Tata Motors, Reliance Industries, UltraTech Cement and Asian Paints were also among the major gainers.

ITC Hotels, Zomato, Nestle and Maruti were among the laggards.

In Asian markets, Seoul, Tokyo and Hong Kong ended significantly higher.

European markets were trading mostly lower. US markets ended in the negative territory on Monday.

"Yesterday, the Indian market struggled to absorb the optimism generated by the good Union Budget due to heightened geopolitical risks stemming from ‘Trump tariff war’. However, India could outperform in a weak global market, and as a rebound has been triggered in the global sentiment, it has fuelled a sharp surge in domestic equities," Vinod Nair, Head of Research, Geojit Financial Services, said.

Global oil benchmark Brent crude dropped 1.05 per cent to USD 75.16 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,958.37 crore on Monday, according to exchange data.

The BSE bellwether index Sensex declined 319.22 points or 0.41 per cent to settle at 77,186.74 on Monday, snapping its five-day rally. The Nifty declined 121.10 points or 0.52 per cent to 23,361.05.