Ending its six-day string of losses, the BSE benchmark Sensex on Monday advanced by 30 points to close at 18,339 on the back of buying in ITC, Bharti Airtel and auto shares, including Maruti Suzuki, amid a firming global trend.
However, the NSE Nifty index extended its losses for the seventh straight day as it eased 2.65 points to 5,571.40.
The Sensex, which had tumbled to two-month lows by losing 593 points or 3.14% in the earlier six sessions, recovered by 29.63 points, or 0.16%, to end at 18,339 led by gains in auto and FMCG sectors mostly.
13 stocks of the 30-share Sensex gained, while 17 scrips including Tata Power, TCS, Tata Steel and HDFC declined.
Brokers said buying at low levels in selective counters helped Sensex end in positive zone amid investors judging the recent losses as overdone. Auto stocks closed with gains on hopes of better numbers.
Maruti led the gainers in Sensex with a 3.87% rise, followed by Bharti Airtel. The telecom major shot up to three-month high by adding 2.89% on reports that Credit Suisse has upgraded the stock to "outperform".
ITC, Bajaj Auto and M&M rose in 1.6-2.7% range.
Total market breadth was weak despite positive closing of the Sensex as second-line stocks attracted profit-booking, indicating cautious approach adopted by retail investors ahead of the Winter session of the Parliament, which starts from Thursday, said traders.
"After initial volatility, the markets remained range bound for most of the day...today any kind of fall was arrested by the strengthening of rupee versus US dollar. The dollar fell 0.4% for the day," said Milan Bavishi, Head Research, Inventure Growth & Securities.
Traders said the domestic stock market was also helped by firming Asian trends and higher opening in Europe on reports that US President Barack Obama has signalled confidence of striking a deal with US Congress on a new budget.
Kishor P Ostwal, CMD, CNI Research Ltd said: "After so many weak sessions, bulls fought back and Sensex closed higher. Nifty support is at 5540 and resistance at 5650. Above 5650, we can see sharp short covering as market is in oversold state."
Asian stocks, excepting Taiwan, ended with gains between 0.11-1.43%.
European markets were quoting mixed with downward bias.
Germany's DAX was down 0.20% and the UK's FTSE by 0.45% while France's CAC was marginally up.
Back home, major gainers from the Sensex pack were Maruti Suzuki (3.87%), Bharti Airtel (2.89%), Bajaj Auto (2.23 pc), M&M (1.60%) Hero Motocorp (1.37%) and NTPC (1.11%).
"Later in the week attention will shift to the Winter Session of Parliament which begins on November 22," said Amar Ambani, Head of Research, IIFL.
However, Tata Power dropped by 2.52%, followed by TCS (1.90%), Tata Steel (1.61%), HDFC (1.23%), L&T (1.22 pc), Gail India (1.18%), Dr Reddy's Lab (1.09%) and Hindalco (1.01%).
Among the sectoral indices, the BSE-Auto firmed up by 1.04% and BSE-FMCG by 0.87%. Among losers, BSE-CD dropped by 1.14%, BSE-CG (0.83%), BSE-HC (0.75%) and BSE-Metal (0.67%).
"Expectations of robust monthly sales are building up in auto stocks primarily due to strong pending orders," said Bavishi of Inventure Growth & Securities.
The market breadth, however, continued to remain negative as 1,766 stocks finished with losses while 1,062 scrips closed with gains.
The total market turnover fell further to Rs 1,793.44 crore from last Friday's level of Rs 2,387.83 crore.
Foreign Institutional Investors (FIIs) bought shares worth a net Rs 509.71 crore on last Friday as per provisional data from the stock exchanges.