Buying in FMCG, banking, metal and banking stocks supported the markets while telecom, technology, cement, realty and oil marketing companies' shares remained under pressure throughout the session.
Short covering also aided the 50-share NSE Nifty to recover 106.35 points from day's low of 4,921.05, before closing the day at 5027.40, up 0.48 pc or 24.20 points.
The 30-share BSE Sensex went up 92.13 points or 0.55%, to settle at 16,958.54, after seeing recovery of 336.49 points from day's low of 16,622.05. The Nifty Oct future ended with 14 points premium.
Nifty back above 4950; FMCG, metals, pharma up
Despite the recovery led by Reliance Industries, SBI, ONGC and HDFC Bank, Nifty was trading lower.
Sell-off continued in telecom, technology, realty, cement, power, capital goods and oil marketing companies' shares.
At 1: 21 pm, Nifty turned back above 4950 and was down 43 points, to 4,960. The Sensex taked 119 points, to 16,747. The broader indices were down 1.5 to 2 per cent.
The losses were capped to a certain extent due to the buying in FMCG, metal and select pharma stocks.
1: 50 PM
Telecom continues to weigh on mkts; Nifty slips
For the second consecutive day, continuous sell-off in telecom, realty, capital goods, power, oil marketing companies' shares and Reliance Industries put pressure on the markets.
Nifty plunged to touch a low of 4948.60 and the markets shrugged off positive global cues.
TRAI's step towards on pay-per-second tariff led the telecom stocks to slip more. Early losers Bharti Airtel, Reliance Communication and Idea Cellular dipped further, are trading down 10 to 11 per cent.
At 11:11 am, the Sensex fell 101 points at 16,765 and the Nifty was down 37 points at 4,966, while the broader indices lost over 1.2 per cent.
In the realty, Orbit Corporation, Unitech and DLF tanks while Torrent Power, Suzlon Energy, NHPC, GVK Power, GMR Infra, Neyveli Lignite, Lanco Infratech, Reliance Power and Power Grid Corp were the losers in Power stocks.
On a positive note, FMCG stocks like ITC and HUL gained 1.5 to 2 per cent. And in the metals, Sterlite Industries, Hindalco, SAIL, JSW Steel, NALCO and Tata Steel were up 0.5 to 1 per cent.
12: 24 PM
Sensex bounces back; telecom drags
As expected, the Sensex bounced back riding on the back of positive global cues. However sell off in telecom continued to haunt the markets for the second consecutive session capping early gains.
At 10:15 am, the BSE Sensex was up 93 points at 16,772 but NSE Nifty went down 34 points to 4,967.
Telecom, capital goods, power, oil & gas and realty stocks dragged on the markets. However, metals and technology stocks were supporting the markets.
As TRAI is mulling over making per second billing compulsory which will affect the earnings, Bharti Airtel plunged 7 pc, Reliance Communication dipped 6.5 pc and Idea Cellular was down 12 per cent.
Among the midcaps, JSL was up over 5 per cent, 3i Infotech, Polaris, Mahindra Satyam and NIIT gained over 1 per cent and UCO Bank rose 1.5 per cent.
Tata Teleservices slipped 2 per cent.