The Bombay Stock Exchange benchmark index Sensex closed nearly 30 points higher on select buying by funds even as late profit booking eroded early gains after a better economic forecast.
The 30-share index rose by 29.04 points to close at 18,037.19 points. It touched an intra-high of 18,135.02 with realty, auto, and oil and gas stocks leading the recovery.
The broad-based National Stock Exchange index Nifty ended a shade higher at 5,396.00 points, up by 0.25 point, after moving between 5,440.35 and 5,376.95.
Market sentiment improved after the government estimated economic growth for the current financial year at 8.6 per cent against that of 8 per cent a year ago.
However, late selling by funds as well as retail investors, mostly of a profit-booking nature, trimmed early gains at several counters, brokers said.
Stocks of metal sector were in good demand largely in tandem with rising base metal prices at the London Metal Exchange on hopes that the economic recovery would boost demand outlook for the metals.
The metal sector index rose by 11.16 points to 16,195.90 points as shares of Tata Steel, Jindal Saw and Sterlite Industries recorded handsome to moderate gains.
Among other benchmarks, the IT sector index gained 11.52 per cent to 6270.02 as the segment major Infosys rose by Rs 42.70 to Rs 3,089.05.
The Oil and gas sector index ended 71.32 points higher at 9,494.41 points after Reliance Industries surged over 1 per cent to Rs 929.30 while ONGC edged up by Rs 3.55 to Rs 1,193.85.