Benchmark BSE Sensex and Nifty soared over 2.5 per cent, logging their best single-day gain in more than three months, on Tuesday after value buying in banking, IT and oil stocks.
The 30-share Sensex jumped 1,564.45 points or 2.70 per cent to settle at 59,537.07. During the day, it zoomed 1,627.16 points or 2.80 per cent to 59,599.78.
The broader NSE Nifty advanced 446.40 points or 2.58 per cent to 17,759.30.
All the 30-Sensex components ended in the green, with Bajaj Finserv rallying 5.47 per cent followed by Bajaj Finance which jumped 4.86 per cent.
IndusInd Bank, Tech Mahindra, ICICI Bank, Kotak Mahindra Bank, Tata Steel and HDFC were among the other major winners.
Elsewhere in Asia, markets in Seoul and Tokyo ended in the green, while Shanghai and Hong Kong settled lower.
Stock markets in Europe were trading higher during mid-session deals. The US markets had ended lower on Monday.
"Today's rebound indicates the domestic economy's resilience in comparison to its global peers. Although the markets are currently at premium valuations, continued support from foreign investors aided domestic stocks to inch higher," said Vinod Nair, Head of Research at Geojit Financial Services.
The BSE benchmark tanked 861.25 points or 1.46 per cent to settle at 57,972.62 points on Monday. The Nifty fell 246 points or 1.4 per cent to 17,312.90 points.
Meanwhile, the international oil benchmark Brent crude declined 2.60 per cent to USD 102.52 per barrel.
Foreign institutional investors (FIIs) offloaded shares worth Rs 561.22 crore on Monday, according to exchange data.