The 30-share Bombay Stock Exchange index, Sensex, which had tumbled 333 points yesterday, recovered 18.64 points at 18,011.97, after touching day's high of 18,110.39.
Sensex had dropped to the lowest level since March 22 yesterday. It has fallen 12 per cent this year on concerns over inflation, high interest rates and lower-than-expected fourth quarter corporate earnings.
The broad-based National Stock Exchange index, Nifty, rose 8.30 points to 5,394.85. It touched the day's high of 5,422.60 and a high of 5,467.45.
Brokers said investors bought amid positive cues from global markets, especially Europe, and slight easing of crude oil prices.
They said lower levels, after yesterday's market plunge, encouraged investors to pick up strong stocks.
However, settlement of the monthly derivatives contracts, slated for this week, kept some pressure on the market and capped the gains.
The capital goods sector gained the most, 1.19 per cent to 12,958.82 as Larsen and Toubro rose 1.75 per cent to Rs 1,641.10 and BHEL by 0.73 per cent to Rs 1,949.65.
The recently beaten banking stocks also recorded fresh gains. The Banking index rose by 0.57 per cent to Rs 11,880.02 as ICICI Bank gained 1.27 percent to Rs 1,019.35.
