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The Sensex rebounded on Tuesday from two-month lows hit in the previous session, as blue-chip stocks such as Reliance Industries gained on short-covering ahead of the expiry of June derivative contracts later this week.
Domestic shares were also helped by a late recovery in Chinese stocks from recent hefty losses and comments by top US Federal Reserve officials that eased fears of an imminent end to its stimulus.
However, analysts warned shares would likely remain weak in the near term after foreign investors sold Rs 9,291 crore over 10 consecutive sessions to Monday.
A number of shares have hit 52-week lows this month, including Bharat Heavy Electricals and Hindustan Petroleum Corporation on Tuesday.
"A majority of stocks are below the 2008 low. The index is deceptive. Chances of going down are much higher," said Vijay Kedia, director at private wealth management firm Kedia Securities.
The benchmark BSE Sensex rose 0.48 per cent, or 88.26 points, to 18,629.15, after hitting its lowest intraday level since April 16 on Tuesday.
The Nifty rose 0.34 per cent, or 18.85 points, to 5,609.10. Blue chips, which got punished heavily in June from the foreign sell-off, were among the leading gainers on Tuesday.
Conglomerate Reliance Industries rose 1.4 per cent, while cigarette maker ITC ended 1.7 per cent higher. Crompton Greaves rose 9.8 per cent after it said its board would consider a buy back of shares.
