Trading in the negative zone for most part of the day, the index recovered on fag-end buying ahead of the May derivatives expiry.
"With the continued pressure of derivative contracts expiry, markets are in the consolidation mode. It has been a dismal quarter of earnings so far for the India Inc, adding to the spoiled sentiment," said Gaurav Jain, Director of Hem Securities.
However, the Sensex bounced back following emergence of value-buying particularly in banking stocks in the last half-an-hour of trading on hopes of rate cut by RBI.
The barometer settled higher by 33.25 points or 0.12 per cent at 27,564.66.
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The gauge had lost 426.09 points in the previous two sessions on lower-than-expected earnings from bluechip firms.
The wider 50-issue NSE Nifty, however, closed down by 4.75 points or 0.06 per cent at 8,334.60.
On Sensex, among banking stocks, Axis Bank rose by 2.26 per cent, HDFC Bank by 1.32 per cent and ICICI Bank by 1.1 per cent. State-run SBI gained 1.23 per cent.
"With just a day before near month derivative contracts expire, rollovers of futures are seen to be quite low, suggesting that traders are less likely to continue with the same bets in the June contracts too," said Anand James, Co Head Technical Research Desk of Geojit BNP Paribas.
In the overseas market, Asian stocks ended mixed as key indices in China, Japan and Taiwan firmed up by 0.25 per cent to 0.63 per cent, while Hong Kong, Singapore and South Korea fell by 0.60 to 1.68 per cent.