The Sensex and Nifty edged higher by nearly 0.3 per cent on heavy buying in consumer durables, banking, oil & gas and PSU stocks amid firm Asian cues.
Domestic sentiment was buoyed on action in select blue-chip counters, but investors remained cautious ahead of February series F&O expiry on Thurday.
The 30-share BSE index Sensex ended higher by 100.01 points or 0.35 per cent at 28,761.59 and the 50-share NSE index Nifty closed up 28.65 points or 0.32 per cent at 8,907.85.
Among BSE sectoral indices, consumer durables index gained the most by 2.44 per cent, followed by banking 0.97 per cent, oil & gas 0.87 per cent and PSU 0.67 per cent. On the other hand, TECk index was down 0.51 per cent and IT 0.17 per cent.
Top five Sensex gainers were Axis Bank (+5.2%), Asian Paints (+1.29%), Reliance (+1.24%), Adani Ports (+1.13%) and ICICI Bank (+1.1%), while the major losers were Bharti Airtel (-4.02%), TCS (-1.74%), ITC (-0.85%), Sun Pharma (-0.82%) and Maruti (-0.52%).
Jio announcement
Telecom stocks were down as Jio's free data offer has hit rivals, raising concerns about competition and margins in the sector. On Tuesday, Bharti Airtel was down 2.4 per cent, while Idea Cellular was 0.2 per cent lower.
Reliance Jio Infocomm, the digital arm of Reliance Industries, has crossed 100-million customer mark 170 days after its launch.
Meanwhile, Ambuja Cements Ltd fell as much as 2.8 per cent in its biggest intraday percentage drop since December 12, 2016 on weak December-quarter sales.
However, the Nifty IT index rose as much as 1.2 per cent to its highest since August 25, 2016 after TCS had said on Monday it would buy back shares worth up to Rs 16,000 crore ($2.39 billion) at a substantial premium, raising expectations rivals such as Infosys would follow suit.
Tech Mahindra climbed 1.9 per cent and HCL Technologies gained 1.4 per cent, while TCS was down 0.3 per cent.
Metal stocks also rose with Jindal Steel and Power Ltd gaining as much as 10 per cent to its highest since June 3, 2015.
The Centre had on Monday extended anti-dumping duty on some steel products from China by five years, in a bid to retain protectionist barriers and stem the tide of cheap foreign products.
Asian shares
Asian stocks held ground on Tuesday though Chinese equities surged to a fresh two-month high as domestic funds piled into financial counters on expectations the world's second biggest economy may have turned a corner.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent on Tuesday and held below a 19-month peak hit last Thursday. The index is up more than 11 per cent since December 23, which marked the trough in a sell-off triggered by Donald Trump's surprise win at the US election in November.
With US markets closed for the Presidents Holiday on Monday, Asian markets have had few global cues off which to trade.