Benchmark indices rebounded more than three per cent on signs of the cooling of tensions between Russia and Ukraine.

Reports of Russia pulling back some of its troops not only soothed investor nerves but also triggered buying in beaten down sectors such as IT and finance.

Brokers are keeping their fingers crossed amid the de-escalation of tensions following the visit of German Chancellor Olaf Scholz to Russia. Nato secretary-general Jens Stoltenberg has reportedly said he has seen no signs of any movement of Russian troops from the Ukraine border, adding he expects the situation to improve.

The 30-share Sensex on Tuesday zoomed 1736.21 points or 3.08 per cent to end above the 58000-mark at 58142.05, entirely recouping the steep losses suffered on Monday. This was its biggest one-day jump since February 1, 2021.

All the index constituents ended in the green: Bajaj Finance led the list with its stock rising 5.13 per cent, followed by SBI, Bajaj Finserv, Larsen & Toubro, Titan and Wipro which gained up to 4.55 per cent.

NSE's Nifty 50 settled higher by 509.65 points or 3.03 per cent at 17352.45.

The broader market was also firm with the Nifty mid-cap 100 index rallying 2.86 per cent and the Nifty small-cap 100 index by 2.51 per cent.

The developments also cooled oil prices with the benchmark Brent retreating from a 7-year high on Monday to trade below $94 per barrel.

“For now, Nifty seems to have taken support near the 16,800-17,000 zones which is forming a crucial base for the market to resume its upward movement. However, volatility cannot be ruled out as several global factors continue to drive investor’s sentiments,’’ Siddhartha Khemka, head - retail research, Motilal Oswal Financial Services, said.

Zomato lows

There were some anxious moments for the shareholders of Zomato as the scrip fell below its issue price of Rs 76 during intra-day trades on the BSE. The share fell to a fresh 52-week low of Rs 75.75. It recovered the losses to close at Rs 82.75 — a gain of 0.42 per cent.

The recent correction has been brutal on some of the newly listed stocks with Zomato falling over 38 per cent in the last one month.

Analysts warned that even if the Russia- Ukraine tension gets diffused, apprehensions of rising inflation leading to sharp interest rate hikes will keep a lid on the rally.

“With commodity prices (especially oil) rising, supply-side disruptions along with rising input costs pressures will keep inflation higher over the coming months. We expect CPI inflation to remain elevated in the 5.5-6 per cent range until April 2022,,” Tanvee Gupta Jain, economist, UBS Securities, said in a note.

“We expect the monetary policy committee (MPC) to keep the repo rate unchanged till first half of 2022-23, before delivering a 50 basis points hike in the second half starting August policy,’’ she said.