In the 30-share Sensex, 18 stocks closed with gains while 12 ended in the negative zone. The uptrend was supported by Sterlite Industries, Tata Steel, Reliance Industries, Sun Pharma, Tata Motors, Hero MotoCorp and Dr Reddy's Lab.
"Markets opened on a slightly positive note on supportive cues from the global markets and continued to gain... Profit booking emerged during the early afternoon session. Volatility was at fore today," said Shanu Goel, Senior Research Analyst, Bonanza Portfolio.
The BSE benchmark index finally ended the day 36.83 points up at 16,896.63 after jumping 103 points intra-day.
Similarly, the 50-share National Stock Exchange index Nifty rose by 16.70 points, or 0.33 per cent to 5,120.55.
Brokers said global investor sentiment remained better on hopes that the Fed might expand stimulus measures when the two-day FOMC meeting concludes later today.
The domestic market was further supported by the trend in Asian stocks which surged to a one-month high and better opening in Europe followed by overnight gains in US markets.
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Indices in Hong Kong, Japan, Korea and Indonesia closed up in the 0.3-1.2 per cent range while indices in France, Germany and the UK were trading mixed in initial trading.
The US meeting outcome is expected to dominate our markets tomorrow, according to Milan Bavishi, Head Research, Inventure Growth & Securities.
Meanwhile, rupee was trading at 56.10 against the dollar on thin volumes after closing at 55.96 yesterday. (MORE)