The Indian market bounced back sharply on Tuesday, shrugging off the negative global cues and a weak IIP report for March. Extensive short covering, positive sentiment on account of net buying by foreign funds in the past few sessions and higher U.S. index futures, which pointed towards a recovery on Wall Street on Tuesday, helped the market recovery.

Industrial production contracted 2.3 percent in March compared to a 5.5% expansion in the same month last year and a revised 0.7 percent fall in February, data from the Central Statistical Organization showed. The worst hit was capital goods sector which recorded a negative 8.2% growth compared to 20.3% expansion in the same period a year ago.

However, according to market experts, the economy will bottom out in the coming months. After staying in negative terrain for another month, industrial production is expected to show positive growth on the back of higher demand for steel, automobiles and a favorable base effect that will come into play from May.

The BSE Sensex cut is early loss and finished near the day's high at 12,158, up 475 points or 4.07% over the previous close. Likewise, after remaining range bound for the first two hours till noon, the S&P CNX Nifty rose sharply by 126 points or 3.56% to 3,681.

On the BSE, the market breadth was positive, with advancers outnumbering decliners by 1410 to 1101. The mid-cap index rose 0.94%, the small-cap index gained 1.32% and the broad-based BSE 500 index rallied 3.21%.

Stocks across the sector closed in positive territory. While IT, banking and oil/gas stocks led the gainers, defensive FMCG and healthcare stocks showed only modest gains.

Among the major gainers, HDFC surged up 7.66%, Wipro climbed 7.40%, ICICI Bank soared 6.72%, Bharti Airtel rallied 6.23% and Infosys moved up 5.51%.

Reliance Industries, Hindalco, BHEL, Jaiprakash Associates, Mahindra & Mahindra, Reliance Communication and HDFC Bank were the other prominent gainers. Twenty-nine out of 30 Sensex stocks closed in the green, with the exception of Hindustan Unilever (HIL). HIL ended down 0.44%.

KEC International rallied 4.22% on bagging new orders worth Rs.111 crore from the Middle East, Australia and India. Tata Motors gained 3.89% after the Gujarat High Court dismissed a PIL challenging sanction of 1100 acres of land for Nano car project near Sanand on Monday.

JSW Steel declined 1.39% following reports that the company is planning to sell its plants in the U.S. to cut mounting losses. Tata Steel rose 1.40% after its UK subsidiary informed its lenders that it would prepay debt of over 200 million pounds of the non-recourse debt to de-leverage its European operations.

Elgi Equipments moved down 1.11% after it has incorporated a wholly owned subsidiary in China. Adlabs Films advanced 4.45% after foreign investor Citigroup Global Market Mauritius bought 7.17 lakh shares of the company through open market transactions on Monday.

Oil explorer Reliance Industries surged up 5.32%, Cairn India rose 2.06% and ONGC edged up 0.34% after crude oil price rose above $59 a barrel in Asian trading. State-owned oil companies HPCL, BPCL and IOC also ended sharply higher.

Gujarat NRE Coke gained 4.17% after Gujarat NRE Minerals, its Australian subsidiary, secured a $50 million long-term loan to ramp up mining production in Australia. Orchid Chemicals & Pharmaceuticals added 3.01% after the company reportedly received final approval from the U.S. FDA for a generic drug. Hindustan Zinc slipped 0.04% after the company cut the prices of lead by 1.8% or Rs. 1,593 a tonne.

Reliance topped the traded value with a total turnover of Rs.253.59 crore, followed by ICICI Bank (Rs.222.20 crore), Reliance Capital (Rs.192.47 crore), HDIL (Rs.191.35 crore) and Suzlon (Rs.166.69 crore).

Cals Refineries led the traded volume with trades of 36.72 million shares, followed by Unitech (30.19 million), Suzlon (21.60 million), HDIL (11.11 million) and Ispat Industries (10.44 million).

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