Financial, FMCG, healthcare, energy and infra stocks fuelled the rally after the initial volatility. After a firm start, the key index failed to hold on to its gains and remained under pressure during most part of the day.
US Federal Reserve's policy statement later in the day on its USD 85 billion a month bond-buying programme weighed heavily on the market. Indian markets have been the biggest beneficiaries of the Fed's liquidity inflows.
However, equities reclaimed lost ground in late afternoon on strong buying in frontline stocks and reclaimed the key 5,900 level briefly before ending with smart gains.
The 50-share Nifty swung between a high of 5,916.90 and a low of 5,840.20 before finishing at 5,899.45, posting a smart rise of 49.25 points, or 0.84 per cent, over last close.
Most of the other Asian and emerging markets ended higher amid caution ahead of the US Fed meeting
Specific actions were seen in jewellery stocks with prices rallying as much as five per cent following the overnight RBI decision to hike import duty on gold and silver jewellery to 15 per cent from 10 per cent.
DLF, NTPC, Tata Power, Grasim, Bank of Baroda, L&T, IDFC, Axis bank, SBIN and IndusInd Bank were the prominent gainers from the Nifty bunch.
Key losers included BHEL, HeroMoto, Sesa Goa, Cairn, NMDC, Power Grid, Lupin, HCL Tech, Bajaj Auto and Infosys.
Turnover in the cash segment fell to Rs 8,692.33 crore from 8,867.24 crore yesterday. A total of 4,569.28 lakh shares changed hands in 50,59,271 trades. The market capitalisation stood at Rs 62,79,043 crore.