Value buying, coupled with the successful passage of the crucial bankruptcy bill in the Lok Sabha, saw the Indian equity markets rise on Monday.
The barometer index of the Indian equity markets gained by 217 points during the day's trade.
Initially, both the bellwether indices of the Indian equity markets opened on a weak note in sync with their Asian peers and last Friday's slump.
However, both the key indices soon rose on the back of value buying and a further fall in international crude oil prices that buoyed investors' sentiments.
Apart from oil prices, metal stocks, too, supported the day's gains -- as investors expected the government to set a minimum import price on several steel products.
In addition, the passage of crucial bankruptcy bill in the Lok Sabha gave a major boost to markets.
Besides, investors have hedged their hopes on the government getting other critical bills approved by parliament including a legislations on setting up of commercial courts and amendments to the Arbitration and Conciliation Act.
Even the clarity on the status of the GST (Goods and Services Tax) bill getting delayed due to parliament's logjam increased risk-taking appetite of investors.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed higher by 217 points during the day's trade.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) also gained. It ended higher by 72.50 points or 0.93 percent up at 7,834.45 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,425.32 points, closed at 25,735.90 points -- up 216.68 points or 0.85 percent from the previous day's close at 25,519.22 points.
The Sensex touched a high of 25,757.84 points and a low of 25,413.54 points during the intra-day trade.
The Sensex had closed the previous session on December 18, down 284.56 points or 1.10 percent, while the Nifty was lower by 82.40 points or 1.50 percent.
"We saw a relief rally taking place today after Friday's profit bookings. The rally was supported by value buying and clarity on the passage status of some major economic legislations," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"The upcoming US GDP (gross domestic product) figures scheduled for tomorrow's release will be on focus, being the first crucial data greeting markets after the FOMC (Federal Open Market Committee) decided to raise US benchmark rates."
Nitasha Shankar, vice president for research with YES Securities said that the Indian markets ended trade higher, amidst thin volumes suggesting a range bound movement for markets.
"Further, broader markets gained in line with the headline indices. Market breadth favoured the bulls throughout the day with 1,795 advancing shares against 909 declining," Shankar told IANS.
"All major sectorial indices, barring the pharma index, ended in the green with gains of one percent and higher. Pharma index declined one percent led by a sharp fall in the Sun Pharma stock."
Besides equities, even the Indian rupee gained in the day's trade. It strengthened by five paise at 66.35 to a US dollar from its previous close of 66.40 to a greenback.
Both, the foreign and domestic institutional investors were net buyers in the day's trade.
According to data with stock exchanges, FIIs invested about Rs.37.37 crore, while DIIs bought stocks worth Rs.62.7 crore.
Sector-wise, healthy buying was witnessed in banking, automobile, metal, information technology (IT) and FMCG (fast moving consumer goods) stocks.
The S&P BSE banking index augmented by 270.70 points, automobile index gained by 153.54 points, metal index increased by 105.48 points, IT index rose by 102.39 points and FMCG index was higher by 97.64 points.
On the other hand, healthcare and consumer durables scrip were trading in the red.
The S&P BSE healthcare index receded by 86.69 points and consumer durables index declined by 77.73 points.
Major Sensex gainers during Monday's trade were ICICI Bank, up 3.24 percent at Rs.258.20; ONGC, up 3.16 percent at Rs.230.30; ITC, up 2.68 percent at Rs.325.75; Mahindra and Mahindra (M&M), up 2.64 percent at Rs.1,277.15; and Axis Bank, up 2.09 percent at Rs.441.45.
The major Sensex losers were Sun Pharma, down 4.55 percent at Rs.754.45; Gail, down 0.97 percent at Rs.336.70; Hindustan Unilever, down 0.81 percent at Rs.852.10; and Asian Paint, down 0.66 percent at Rs.875.05.