After resuming lower in the morning, the BSE benchmark index continued to trade listless in the first half and touched the day's low of 17,522.10. However, emergence of strong buying activity in the closing stages of trading lifted the index to 17,642.38 points.
The Sensex finally settled at 17,633.45, up 75.71 points or 0.43 per cent over previous close. HDFC that gained 3.71 per cent led gainers in Sensex. Sterlite, Maruti, Bajaj Auto, Bhel and Bharti Airtel gained between 1.7-2.7 per cent each.
Likewise, the 50-share NSE index Nifty today rose by 27.50, or 0.52 per cent to 5,347.90.
"Markets, in general, are expecting the government to formulate and implement key reforms which shall give boost to the economy," said Nidhi Sarswat, Senior Research Analyst, Bonanza Portfolio. The Sensex had lost 44 points in last three sessions as cautious sentiment prevailed.
Reports that government could resume privatisation plan by selling stakes in Bhel and Sail also cheered investors, said Milan Bavishi, Head-Research, Inventure Growth & Securities.
Among 30-share Sensex, Tata Motors led the 11 counters that ended lower. HUL, Hero MotoCorp, Hindalco and Tata Steel lost around one per cent each.
Brokers said the sentiment also improved following market regulator SEBI's plans to announce wide-ranging reforms in the mutual fund and the IPO space.