The benchmark Sensex on Wednesday recovered 48 points to 28,386.19 after realty scrips, led by DLF, rose as government approved hiking floor area ratio in Delhi and FMCG shares, including ITC , jumped after Tuesday's slump.
Rate cut hopes and short-covering ahead of Thursday's monthly expiry of derivative contracts boosted buying. Positive cues from global markets and lower crude oil price also provided support, traders said.
In line with the rise in key indices, the Indian rupee also firmed up to 61.83 (intra-day) against dollar. In volatile movements, the BSE Sensex resumed lower and then slipped further to hit the day's low of 28,261.31.
Emergence of buying towards the middle of session helped wipe off initial losses to close higher at 28,386.19, logging a rise of 48.14 points, or 0.17 per cent. The Sensex had lost 161.49 points in Tuesday's trade.
Among the 30-Sensex pack, 17 constituents led by GAIL, Sesa Sterlite, ITC, BHEL, Hindalco and M&M ended higher.
ITC had dropped 5 per cent on Tuesday after Ministry of Health accepted an expert panel's recommendation on prohibition on sale of single stick of cigarette and increasing minimum legal age for sale of tobacco products.
Sensex laggards included Bharti Airtel, ICICI Bank, Bajaj Auto, RIL, TCS, L&T, Maruti Suzuki, HDFC Bank and Sun Pharma. DLF surged 7.2 per cent and Unitech rose 4.4 per cent after Urban Development Ministry approved enhancement of Ground Coverage and Floor Area Ratio in Delhi.
Led by the Delhi government's decision to increase the Delhi city's floor area ratio by 200 per cent, most realty sector stocks saw huge surge in buying activity, said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
The 50-issue Nifty of the NSE also saw a mild recovery and closed 12.65, or 0.15 per cent, higher at 8,475.75. Brokers also said after Tuesday's drop, activity gathered momentum ahead of key macro economic data releases, including September-quarter GDP data later this week. Meanwhile, provisional data showed that FPIs/FIIs bought shares worth a net Rs 1,168.94 crore on Tuesday.
Sectorally, BSE Realty index gained the most by surging 4.03 per cent, followed by Power 1.13 per cent, Metal 1.08 per cent and FMCG 1.07 per cent, among others. Smaller shares also saw fresh spell of buying with BSE Smallcap index (1.12 per cent) and Midcap index (0.62 per cent) logging gains.