After a huge selling witnessed in the previous session, benchmark indices closed higher on December 22 with Nifty above 13450. At close, the Sensex was up 452.73 points or 0.99% at 46,006.69, and the Nifty was up 137.90 points or 1.03% at 13,466.30 on Tuesday.
Adani Ports, HCL Tech, Tech Mahindra, Infosys and GAIL were among major gainers on the Nifty, while Kotak Mahindra Bank, Bajaj Finance, HDFC, IndusInd Bank and Hindalco were among the laggards.
All the sectoral indices ended in the green led by the IT index. BSE Midcap and Smallcap indices rose 1 percent each.
HCL Tech was the top gainer in the Sensex pack, rallying around 5 per cent, followed by Tech Mahindra, Infosys, PowerGrid, Sun Pharma, L&T and Nestle India.
Domestic equities recovered sharply from the day's low in a volatile trading day mainly aided by strong buying in IT stocks, said Binod Modi, Head-Strategy at Reliance Securities.
Investors once again started focusing on safe counters which are considered to be resilient from pandemic and IT, pharma, telecom, FMCG and chemicals were in focus, he noted.
"While concerns of new strain of coronavirus do not augur well for the markets globally, India still looks to be better placed compared to others. However, markets are likely to remain volatile in coming days until clarity emerges about new virus strains and efficacy of ongoing vaccinations," he asserted.
European markets witnessed sharp recovery after German pharmaceutical company BioNTech said it was confident that its coronavirus vaccine would work against the new UK variant.
The variant, detected mainly in London and the southeast of England in recent weeks, has sparked concern worldwide because of signs that it may spread more easily.
While there is no indication it causes more serious illness, numerous countries in Europe and beyond have restricted travel from the UK as a result.
Elsewhere in Asia, bourses in Shanghai, Seoul, Hong Kong and Tokyo ended in the red.
(with PTI inputs)