According to market observers, the key indices discarded the previous day's lacklustre performance to trade with substantial gains as healthy buying was witnessed in consumer durables, healthcare and oil and gas stocks.
The wider Nifty50 of the National Stock Exchange (NSE) closed higher by 28 points or 0.27 per cent at 10,327 points. The top gainers on Sensex were Dr Reddy, SunPharma, Cipla, Bharti Airtel, NTPC and Tata Steel.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 33,438.28 points, closed at 33,478 points -- up 118 points or 0.36 per cent -- from Monday's close.
The Sensex touched a high of 33,625 points and a low of 33,437.61 points. The BSE market breadth was bullish - 1,571 advances and 917 declines.
"Benchmark indices opened on a positive note following higher Asian stocks. The dollar hovered near a one-week high against its peers on the back of higher US yields and a struggling euro," Dhruv Desai, director and chief operating officer of Tradebulls, said.
On Monday, the indices closed on a flat-to-positive note as selling pressure in IT, banking and Teck stocks, along with subdued global cues and outflow of foreign funds, trimmed gains.
The NSE Nifty50 closed higher by 15.15 points or 0.15 per cent to close at 10,298.75 points, while the Sensex closed at 33,359.90 points - up 17.10 points or 0.05 per cent.