Buying in auto and defensive stocks after yesterday’s steep selloff propelled markets higher today. However, selling in oil & gas and metal counters capped the gains. The benchmark Sensex rose 127 points to close at 14,170. The Nifty gained 36 points to end at 4,202.

On the sectoral front, the BSE auto index rose 3.9 per cent led by advances in Escorts, Exide Industries, Hero Honda and M&M. The stocks rose between 5.6-8.8 per cent.

The BSE FMCG index surged 3.8 per cent and the BSE capital goods index ended 1.6 per cent higher.

In the FMCG sector, Marico and ITC were the biggest gainers. Marico zoomed 12.7 per cent while ITC jumped 6.7 per cent.

Oil & gas and PSU stocks, however, were under some selling pressure today. The BSE oil & gas index slipped 1.3 per cent and the PSU index fell 1.7 per cent.

In the PSU space, State Trading Corporation of India, Rashtriya Chemicals & Fertilizers and MMTC fell over 5.9 per cent each.

In the 30-share Sensex pack, 18 stocks advanced while 12 counters fell. ITC was the biggest gainer in the pack. The stock rose 6.8 per cent to Rs 211. JP Associates, Hero Honda Motors and M&M were the other gainers in the pack.

Index heavyweight RIL slid 2 per cent to Rs 1,855 and it was the biggest gainer in the pack.

Elsewhere, European stock markets rose modestly in early trade on Tuesday following late day-before gains on Wall Street — but the fifth straight retreat on Japan's main Nikkei index provided ample evidence that investor sentiment remains extremely fragile.

The gains in Europe came despite further losses in Asia where stocks were weighed down by waning investor optimism about the global economic recovery ahead of this week's meeting of the Group of Eight leaders in Italy.