Despite volatility, Sensex gained 123 points to end the day in the green at 62,969 points, buoyed by FMCG and financial stocks. At the same time Nifty managed to hold fort above 18,600 points, even as metal and pharma slipped into red territory.
Kotak Mahindra and Bajaj Finserv as well as HCL led the pack of gainers, while Tech Mahindra and Hindalco were the biggest losers of the day.
Among global markets, Tokyo, Shanghai and Hong Kong remained subdued while South Korean indices performed well.
After staying in the green for four straight days, Indian markets closed at the highest level in five months.
The positive performance was also supported by foreign portfolio investors buying more Indian stocks, even as domestic investors sold and booked profits.
According to Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities,"Due to absence of cues from the US markets which were shut on Monday, local stocks witnessed cautious optimism with selective buying in banking and IT stocks. However, weakness in metals and oil & gas stocks limited the uptick."
He added that, "Investors are also awaiting the US debt agreement deal on Wednesday, as its outcome would determine the market direction in the near to medium term. Technically, on the daily chart, the Nifty has formed a small body candle which clearly suggests the indecisiveness between bulls and bears. The intraday formation is also suggesting the continuation of a range bound activity in the near future."
