After starting on a weak note, equity benchmark Sensex rebounded over 300 points in early trade on Tuesday, tracking gains in index heavyweights HDFC twins, Infosys and ICICI Bank.
The 30-share BSE index pared its initial losses and rebounded 313.14 points or 0.64 per cent to 49,472.46, and the broader NSE Nifty advanced 99.80 points or 0.68 per cent to 14,737.60.
PowerGrid was the top gainer in the Sensex pack, rising over 2 per cent, followed by M&M, NTPC, IndusInd Bank, Bajaj Finance, Sun Pharma, Dr Reddy’s, ICICI Bank, HDFC duo, and Infosys.
On the other hand, Titan was the sole laggard.
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In the previous session, Sensex finished at 49,159.32, down 870.51 points or 1.74 per cent, and Nifty sank 229.55 points or 1.54 per cent to 14,637.80.
Foreign Institutional Investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 931.66 crore on Monday, as per exchange data.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, a significant fundamental factor from the market perspective is that the US and China are leading the global economic recovery. This is likely to translate into earnings growth particularly in emerging markets like India.
"An important market trend in India is the outperformance of small-mid cap indices. While Nifty is up 4.7 per cent YTD the small and midcap indices are up by 14 per cent and 15 per cent, respectively. This outperformance is likely to continue since there is more value in this segment," he said.
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Further, he noted that while rising Covid-19 cases is a matter of concern, it is unlikely to have a major economic impact.
US equities witnessed a sharp rebound with Dow and S&P 500 scaling fresh highs as investors continued to get comfort from a steady improvement in key economic data, said Binod Modi, Head - Strategy at Reliance Securities.
Elsewhere in Asia, bourses in Shanghai, Seoul, and Tokyo were trading on a negative note in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 0.85 per cent higher at $62.68 per barrel.
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