A late surge in blue-chips, including rate sensitive stocks, steered the benchmark Nifty to rebound over 60 points to close above the crucial 7,100-mark in a highly volatile trading session today.
Hectic short-covering and bargain hunting in beaten down counters, predominantly in PSB stocks along with pharma, energy, infra, media, metal and auto, led the recovery.
Market resumed on a sluggish note following sustained unwinding in banking stocks due to concerns over worsening asset quality as well as credit-downgrade fears.
The key indices retreated below the key 7,000 mark briefly before staging a smart rebound toward the fag-end as traders and investors resorted to heavy buying at low levels.
Positive European cues also bolstered trading mood.
In the meantime, global benchmark Brent fell below USD 32 on the back of disappointing production freeze agreement between top oil exporters Russia and Saudi Arabia.
Elsewhere, barring Shanghai, all major markets in the region closed sharply lower, with Nikkei plunging over 1.36 percent, followed by Hang Seng (1.03 per cent) and Kospi (0.23 per cent).
European bourses, however, extended overnight gains ahead of release of Federal Reserve minutes of its January meet.
The 50-share Nifty resumed modestly firm at 7,201.25 and fluctuated between 7,123.70 and 6,960.65 before ending at 7,108.45, showing a rise of 60.20 points, or 1.60 per cent.
Among the key sectoral indices, PSU Bank rallied 2.05 per cent, followed by pharma (1.94 per cent), infra (1.64 per cent), energy (1.60 per cent), media (1.58 per cent), metal (1.01 per cent), auto (1.00 per cent), FMCG (0.98 per cent) and tech (0.80 per cent).
Mid-cap and small-cap indices moved up by 0.95 and 0.46 per cent, respectively.
Top index gainers included Reliance, Infosys, Sun Pharma, Adani Ports, ITC, Tata Motors, L&T, Dr Reddy's, Idea, SBI, BPCL, Bank of India, Zee, Asian Paints, HUL and Maruti.
Notable losers were ICICI Bank, Yes Bank, Lupin, Axis Bank, Coal India, M&M, Cipla, Bosch, IndusInd, HDFC and ACC.
Turnover in cash segment jumped to Rs 16,068.39 crore from Rs 14,976.72 crore yesterday.
A total of 9,525.52 lakh shares changed hands in 79,34,958 trades. The market capitalisation of NSE stood at Rs 85,92,094 crore.
