Oil retailers HPCL, BPCL and IOC were down between 4 percent and 7 percent after sharp rally in crude prices but state-owned oil exploration companies ONGC rose 1 percent and Oil India climbed 3 percent.
The market recouped previous day's losses on Thursday even as crude oil prices hit multi-year highs, with the Sensex gaining nearly 100 points.
Positive Asian cues and the rally in metals & FMCG stocks boosted sentiment, but the sharp correction in oil retailers capped upside.
The 30-share BSE Sensex closed up 95.61 points at 34,427.29 and the 50-share NSE Nifty rose 39.10 points to 10,565.30 while the broader markets outperformed frontliners, with the Nifty Midcap index rising 0.7 percent.
Overall the benchmark indices were rangebound in trade and the volatility is expected to continue in near term as investors look for more corporate earnings and closely monitor crude oil prices, experts said.
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"The recent dull phase in index is showing early sign of exhaustion thus profit booking is advisable on every rise. Nifty should hold decisively above 10,650 for further up move. Participants should keep a close eye on earnings and global markets for cues," Jayant Manglik, President, Religare Broking said.
Pradip Shah of IndAsia Fund Advisors told CNBC-TV18 that investors need to negotiate for higher oil prices as well as fiscal stress. “We have oil, Trump as well as election factors to watch out for. Both oil as well as rupee’s moves add to the inflation for us and that does not augur well for the economy."
Shah said it is good that the economy is performing well and attempting to stand on its feet.
On the global front, Asian stocks closed higher amid improved investor sentiment after US stocks notched gains in the last session, with Hang Seng rising 1.4 percent and Shanghai Composite up 0.85 percent.
European markets were mixed amid fresh earnings reports and higher oil prices. France's CAC and Britain's FTSE were up 0.2 percent each while Germany's DAX fell 0.1 percent at the time of writing this article.
Oil prices extended gains after settling close to 3 percent higher in the previous session on fall in US crude inventories and after sources told Reuters that top exporter Saudi Arabia is seeking to push oil prices higher. Brent Crude oil futures were at USD 74.12 a barrel.
On the stock front, oil retailers HPCL, BPCL and IOC were down between 4 percent and 7 percent after sharp rally in crude prices but state-owned oil exploration companies ONGC rose 1 percent and Oil India climbed 3 percent.
Metal stocks hogged limelight as the Nifty Metal index rising 4.5 percent on higher global commodity prices. Hindalco, Nalco, Tata Steel, Hindustan Copper and Vedanta rallied 3-12 percent.
Technology stocks also supported the market. The Nifty IT index closed up a percent on depreciation in the rupee and ahead of TCS earnings later in the day. TCS & Tech Mahindra were up 1 percent each, Infosys 0.6 percent and HCL Technologies rose 2 percent.
L&T, Yes Bank, Bharti Airtel and UltraTech Cement among others rallied 2-3 percent whereas HDFC, Titan Company and Axis Bank were down 1-2.5 percent.
Merck shares surged 19 percent after the German pharmaceutical and chemicals group agreed to sell its consumer health business to American giant Procter & Gamble and would use the proceeds mostly to pay off debt.
VA Tech Wabag gained 4 percent on order worth Rs 253 crore from Bihar Urban Infrastructure Development Corporation (BUIDCO) while Vascon Engineers rose 4 percent on order from Adhiraj Constructions Private Limited for civil and structural works (residential township) amounting to Rs 119 crore.
Allied Digital was locked at 10 percent upper circuit after one-time settlement of its dues to State Bank of India for Rs 60.34 crore.
Parag Milk Foods gained 5 percent as it expanded footprints in North India by acquiring Danone’s (a French, dairy-based MNC) manufacturing facility in Sonipat, Haryana.