Expectation of a fuel price hike saw the Nifty and the Sensex recover and close marginally in the green.
The Nifty closed at 5,390, up 27 points, and the Sensex closed at 17,853, up 86 points.
Market men said the fuel price hike was imminent as failure to do so would result in a sovereign rating downgrade.
This meant higher borrowing cost for corporates, less access to global credit markets and a de-rating of scrips if India was downgraded to below investment grade, they said.
Oil marketing company scrips IOC, HPCL and BPCL gained ahead of the oil price hike.
“The rain gods seem to have woken up a wee bit late this monsoon season. Although a lot of damage to crops has already been done, even the late showers will come in handy. Reservoirs will swell up, helping farmers in the Rabi season. There might just be some positive impact on food prices, especially that of farm commodities, if the rains continue for few more days," said Amar Ambani, Head of Research, IIFL.
All indices barring metals and auto on the BSE closed in the green.
On the NSE, auto, commodities, metals, media and MNC were the ones that closed in the green.
Volaitility was up 0.72 per cent and the volatility index, India Vix closed at 15.38.
Siemens, IDFC, BPCL, HDFC and Kotak Bank were the top five Nifty gainers while Sesa Goa, Sterlite, Jindal Steel, HeroMotoCorp and PowerGrid were the top five losers.