Equity indices staged a stellar comeback on Tuesday after suffering their worst losses in a year in the previous session as bargain hunters piled into energy, finance and IT stocks amid signs of easing Russia-Ukraine tensions.
European markets clambered up following reports that some Russian troops near Ukraine were returning to their bases, which could de-escalate tensions between Moscow and the West.
A strengthening rupee further bolstered sentiment, traders said.
Recouping the previous day's losses, the 30-share BSE Sensex surged 1,736.21 points or 3.08 per cent to end at 58,142.05. This was its biggest one-day jump since February 1, 2021.
Likewise, the NSE Nifty soared 509.65 points or 3.03 per cent to settle at 17,352.45.
On the Sensex chart, all 30 shares closed with gains, with Bajaj Finance, SBI, Bajaj FinServ, L&T, Titan, Wipro and Asian Paints rallying as much as 5.13 per cent.
"A ray of hope that tension between Russian and Ukraine is de-escalating, prompting a smart recovery in global equities. The domestic market followed the trend as oil prices edged lower.
"India's CPI inflation for January rose to 6.01 per cent, breaching RBI's tolerance level due to high food inflation and low base effect, this will be a point of concern for domestic market in the near-term," said Vinod Nair, Head of Research at Geojit Financial Services.
The retail inflation rate breached the 6 per cent upper tolerance limit of the RBI for the first time in seven months in January, while the wholesale price index stayed in double-digits for the 10th month in a row, as per official data released after market hours on Monday.
Ajit Mishra, VP, Research, Religare Broking Ltd, said, "Markets have been witnessing a roller-coaster ride and we expect the same to continue in near future. In absence of any major domestic event, updates related to Russia-Ukraine tension and its impact on global markets will be on the radar."
In line with the benchmark, all 19 BSE sectoral indices logged significant gains. Auto, banking, teck, realty and IT indices were the top performers, climbing up to 3.87 per cent.
Broader BSE largecap, midcap and smallcap indices rose as much as 2.94 per cent.
Elsewhere in Asia, bourses in Tokyo, Hong Kong and Seoul closed in the red, while Shanghai finished higher.
Markets in Europe were trading in the positive zone in the afternoon session.
Global crude oil benchmark Brent futures fell 2.44 per cent to USD 94.13 per barrel on Tuesday.
The rupee snapped its four-day losing streak to close 28 paise higher at 75.32 against the US dollar on Tuesday, tracking a recovery in domestic equities and weakness of the American currency overseas.
Foreign institutional investors (FIIs) were net sellers in the capital market on Monday, as they offloaded shares worth Rs 4,253.70 crore, according to stock exchange data.
