Benchmark indices ended the day higher in trade led by gains in heavyweights like HDFC and ITC. The Sensex ended the day higher by 161 points, while the Nifty reclaimed the 8000 points mark with gains of 31 points.
Shares in Infosys which went ex-bonus today ended the day flat. Sun Pharma was the top gainer from the Nifty rallying 4 per cent.
PSU banking stocks which had rallied in early morning trade on hopes of fresh capital infusion from the government ended the day lower. State Bank of India and Bank of Baroda were the biggest drags on the Nifty.
Shares in Eicher Motor gained 2.6 percent after CLSA initiated a coverage with a "buy" rating on the stock.
Capital goods and infrastructure stocks had a good session after IIP data came in hugely better than expected. Bhel, Crompton, Voltas were the biggest gainers.
Shares in J P Associates surged a huge 8 per cent in trade on short covering in the stock.
Meanwhile, markets across Asia closed sharply lower on worries over Greece debt crisis. European markets were also seeing cuts of more than one per cent. All eyes would now be on the US Federal Reserve for its 2-day meet which ends on Wednesday and possible cues on interest rates hikes in the US.