Nifty formed a bullish candle on the daily chart, with a long lower shadow indicating buying visible on every small decline.
Sensex was up 148 points, or 0.25 percent, at 60284.31 and Nifty was up 46 points or 0.26 percent at 17992.
Market closed higher for the fourth consecutive session after yet another day of volatile trade, supported by PSU bank, metal, FMCG and auto names.
Following selling in IT stocks as a result of a weak start to the earnings season and weakness in global markets, the domestic market traded in the negative zone.
Strong support from PSU banks on renewed hopes of privatisation and continued buying in consumer goods, metals and auto helped indices close on a positive note.
Global markets traded lower on fears of rising inflation due to soaring commodity prices and energy crunch.
USDINR spot closed 16 paise higher at 75.51, highest level since July 2020, in a volatile session of trading. There may have been intervention from RBI at higher levels, coupled with lumpy corporate flows which pushed prices lower but rising oil prices and firming US bond yields kept bids alive. Over the near term, bias remains upward. Range can be between 75.10 and 75.90 on spot.
While we did see a continuation of profit booking in IT names, the small & midcap space was buzzing with accumulation across sectors. A late surge in the metal index led by aluminium stocks lent support to the rally.
Day witnessed hectic activity in PSU banking space with stocks from 2 wheelers and consumer durables seeing good demand in line with the festive mood.
It was a volatile session for the market but bulls gained strength in late trades as Nifty once again breached the 18000 mark before ending a tad lower below the psychological mark. On daily and intraday chart, Nifty has formed a promising higher bottom formation.
Intraday structure suggests 17850 could be the trend decider level for the bulls. Above the same, the uptrend formation is likely to continue up to 18050/18125 level. On the flip side, below 17850/59850 the uptrend would be vulnerable.
On the sectoral front, auto, FMCG, metal and PSU Bank indices rose 1-3 percent, while IT index lost nearly 1 percent. Smallcap and Midcap indices ended in the green.