Snapping their three-day losing run, market benchmarks ticked higher after a see-saw session on Tuesday on fag-end buying in energy, metal and finance counters amid a firm trend in global markets.
Covering-up of short positions by bears also supported the late recovery in stocks, traders said.
After swinging between gains and losses, the 30-share BSE Sensex finally closed 187.39 points or 0.33 per cent higher at 57,808.58. Similarly, the broader NSE Nifty climbed 53.15 points or 0.31 per cent to 17,266.75.
Tata Steel topped the Sensex gainers' chart with a jump of 3.10 per cent, followed by Bajaj Finance, Bajaj Finserv, Reliance Industries, Titan, Asian Paints and Axis Bank.
In contrast, PowerGrid, TCS, UltraTech Cement, Tech Mahindra, Kotak Bank, L&T and HDFC twins were among the losers, shedding as much as 1.66 per cent. Of the Sensex constituents, 19 shares closed higher while 11 were in the red.
"Indian equities were highly volatile today, swaying between gains and losses while managing to close on a positive note. Selling pressure from FIIs was countered by bargain hunting by domestic investors.
"European shares advanced over ECB President's comments stating that there are lower chances of a measurable tightening of monetary policy, which helped in comforting global investors," said Vinod Nair, Head of Research at Geojit Financial Services.
Meanwhile, the Reserve Bank's rate-setting panel began its three-day deliberations on Tuesday to decide the next monetary policy in the backdrop of Budget 2022-23, inflationary concerns and evolving geopolitical situation.
S Ranganathan, Head of Research at LKP Securities, said, "As policymakers face one of the fastest pace of price increases in the developed markets, global stock markets are facing a challenge in pricing the likely actions by central bankers."