The Sensex ended a lackluster trading day marginally higher as chary investors stayed put on the sidelines awaiting political developments before making any move as the Winter Session of Parliament kicks off from 22 November.
The Sensex and Nifty opened marginally up, but pared their gains quickly enough and stayed range-bound through most of the day. Notable movements were witnessed in the Bharti Airtel and Maruti counters.
The Sensex today advanced by 30 points to close at 18,339 on the back of gains in Maruti Suzuki, Bharti Airtel and ITC amid a firming global trend. The 30-share BSE benchmark index, which had tumbled to a two-month low losing 593 points in the past six sessions, recovered 29.63 points, or 0.16 per cent, to 18,339 led by auto and FMCG sectors.
The index moved between 18,386.78 and 18,256.07 during trading. Of the 30-share Sensex, 13 stocks gained while 17, including Tata Power, TCS, Tata Steel and HDFC, declined.
ITC, Bajaj Auto and Mahindra & Mahindra rose in 1.6-2.7 per cent range.
Among sectoral indices, the BSE Auto sector index gained the most by rising 1.04 per cent, followed by BSE FMCG index (0.87 per cent), BSE TECK (0.06 per cent and BSE Realty (0.02 per cent).
"After initial volatility, the markets remained range-bound for most of the day. While we had seen sharp declines toward the end of the last week, today any kind of fall was arrested by the strengthening of rupee versus the US dollar. The dollar fell 0.4 per cent for the day," said Milan Bavishi, head research, Inventure Growth & Securities.
Traders said the domestic stock market was helped by firming Asian trends and a higher opening in Europe on reports that US President Barack Obama has signalled confidence of striking a deal with Congress on a new budget.
However, the 50-share National Stock Exchange index Nifty eased by 2.65 points to settle at 5,571.40.
Kishor P Ostwal, CMD, CNI Research Ltd said: "After so many weak sessions, bulls fought back and Sensex closed higher. Nifty support is at 5,540 and resistance at 5,650. Above 5,650, we can see sharp short covering as market is in oversold state."
The major Sensex gainers were Maruti Suzuki (3.87 per cent), Bharti Airtel (2.89 per cent), Bajaj Auto (2.23
per cent), M&M (1.60 per cent) Hero Motocorp (1.37 per cent) and NTPC (1.11 per cent).
"Later in the week, attention will shift to the Winter Session of Parliament which begins on November 22," said Amar Ambani, head of research, IIFL.
However, Tata Power dropped by 2.52 per cent, followed by TCS (1.90 per cent), Tata Steel (1.61 per cent), HDFC (1.23 per cent), L&T (1.22 per cent), Gail India (1.18 per cent), Dr Reddy's Lab (1.09 per cent) and Hindalco (1.01 per cent).
Among the sectoral indices, the BSE-Auto firmed up by 1.04 per cent and BSE-FMCG by 0.87 per cent.
"Expectations of robust monthly sales are building up in auto stocks primarily due to strong pending orders," said Mr Bavishi of Inventure Growth & Securities.
The market breadth, however, continued to remain negative as 1,766 stocks finished with losses while 1,062 scrips closed with gains.
The total market turnover fell further to Rs 1,793.44 crore from last Friday's level of Rs 2,387.83 crore.
Foreign institutional investors (FIIs) bought shares worth a net Rs 509.71 crore on last Friday as per provisional data from the stock exchanges.
Asian stocks, except Taiwan, ended with gains between 0.11 and 1.43 per cent.
World share markets and commodities rose on Monday, recovering some of their sharp losses last week, on signs of progress in talks to resolve the fiscal crunch in the United States.
Gains in U.S. stock futures pointed to a firmer start on Wall Street as well, extending a rally that began on Friday.
The optimism was fuelled by comments from U.S. lawmakers who indicated that compromises are possible in negotiations to avert $600 billion in tax increases and spending cuts due to start in January - the "fiscal cliff" that threatens to send the economy back into recession.
MSCI's world equity index jumped 0.7 percent to 398.50 points, recovering part of last week's 2.7 percent fall, its biggest five-day drop since early June.
"The thing about markets is if they can see there's light at the end of the tunnel, then they're going to discount that," said Mike Ingam, market analyst at BGC Partners. "At the moment...there is very little clarity as to what the end game actually is although, of course, everybody expects there to be a compromise."
With inputs from agencies