Domestic stocks, which fell in early trade in a knee-jerk reaction to Greece's 'no' to euro zone bailout conditions, rebounded handsomely in late-afternoon trade, with the benchmark Sensex rallying 115.97 points to end at 28,208.76.
The 50-share Nifty recaptured the crucial 8,500-level.
Financial markets slipped into a bit of a turmoil after Greek voters overwhelmingly rejected the bailout package from the country's creditors, which set off panic among investors here.
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"Indian markets are resilient against Greece crisis. Furthermore, strengthening of the rupee and renewed buying interest of foreign portfolio investors boosted sentiment to shut the day on a firm note," said Gaurav Jain, Director, Hem Securities.
The 30-share Sensex started off sharply lower at 27,857.2 and swayed between 27,774.8 and 28,235.31 before ending at 28,208.76, a gain of 115.97 points, or 0.41 per cent.
The broader Nifty, too, climbed 37.25 points, or 0.44 per cent, to settle at 8,522.15.
The major index gainers included Dr Reddy's (3.64 per cent), Cipla (3.35 per cent), HeromotoCorp (1.34 per cent), TCS (1.37 per cent) and Lupin (1.05 per cent).
The key losers were Vedanta (down 4.45 per cent), Hindalco (1.36 per cent), NTPC (0.76 per cent), Tata Steel (0.73 per cent) and Infosys (0.65 per cent).
Of the 30-share Sensex pack, 19 ended in the green while 11 finished lower.
