Equity benchmark Sensex jumped over 100 points in early trade on Tuesday tracking positive cues from global indices, easing border tension with China and foreign fund inflows.
However, profit-booking at higher levels capped the gains on key indices, traders said.
After touching a high of 36,660.35 in opening session, the 30-share index turned range-bound to trade 64.56 points, or 0.18%, higher at 36,551.84. The NSE Nifty was up 8.50 points, or 0.08%, at 10,772.15.
Infosys was the top gainer in the Sensex pack, advancing around 3%, followed by Bajaj Finance, Bajaj Auto, Asian Paints, Bajaj Finserv, Maruti and Tech Mahindra.
On the other hand, PowerGrid, ONGC, ITC and NTPC were among the laggards.
In the previous session, the BSE barometer closed 465.86 points, or 1.29%, higher at 36,487.28; while the NSE barometer Nifty settled 156.30 points, or 1.47%, up at 10,763.65.
Foreign institutional investors were net buyers in the capital market on Monday, purchasing equities worth ₹348.35 crore, provisional exchange data showed.
According to traders, domestic indices followed global benchmarks that rallied on positive macroeconomic data indicating recovery across major countries.
Further, easing of geopolitical tension between India-China buoyed investor sentiments, they said.
Bourses in Shanghai and Hong Kong were trading with gains, while those in Tokyo and Seoul slipped in the red.
Stock exchanges on Wall Street ended on a positive note in overnight session.
Meanwhile, international oil benchmark Brent crude futures fell 0.37% to $42.94 per barrel.