The BSE Sensex gained 274 points to close the day at 16222 points, while the NSE Nifty gained 85 points.
In Europe markets were trading firm with the German DAX, French CAC and UK's FTSE all up more than half a per cent. However, there were growing worries over the possibility of a Greece exit from the euro and bank losses in Spain aggravated matters further.
Among the shares that gained in trade today were ONGC, Ranbaxy, Bharti Airtel and Axis Bank.
Among the shares that lost ground today were Jaiprakash Associates, Maruti Suzuki, Cairn India and Sun Pharma. Markets are likely to continue taking cues from Europe and will await an EGOM meeting on diesel and LPG hike. Any inability to move forward on diesel and LPG price hike may affect sentiments again.