The benchmark BSE sensex jumped 661 points or 1.38 per cent to close at 48,544; while the broader NSE Nifty moved 194 points or 1.36 per cent higher to settle at 14,505.
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Top gainers in the BSE pack included M&M, Bajaj Finserv, Bajaj Finance, Maruti, Axis Bank and ONGC with their stocks rising as much as 7.81 per cent.
On the NSE platform, except for Nifty IT and Pharma, all other sub-indices finished in green with Nifty PSU Bank up as much as 4.49 per cent.
A severe second wave of the novel coronavirus in India has threatened to disrupt the country’s nascent economic recovery and dragged its main stock indexes from record highs hit in February.
Still, investors are looking ahead to corporate earnings that began on Monday with software services major TCS reporting a 15 per cent rise in March-quarter profit.
India reported more than 160,000 new cases on Tuesday, although the figure was slightly lower from Monday. Maharashtra, home to financial hub Mumbai, also saw a downtick.
“The market is feeling that a lockdown might just be avoided, especially as cases are slightly slowing down in Maharashtra and Mumbai,” AK Prabhakar, head of research at IDBI Capital in Mumbai, told news agency Reuters.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,746.43 crore on Monday, according to provisional exchange data.
Domestic equities look to be modestly good at the moment, Binod Modi, head-strategy at Reliance Securities told PTI.
(With inputs from agencies)