The Sensex and the Nifty ended higher on Monday after touching a more than three-month low earlier in the session as private banks recovered from recent losses, but the sentiment was muted ahead of the US Federal Reserve meeting later this week.

The benchmark BSE index ended higher by 105.92 points or 0.42 per cent at 25,150.35, after shedding as much as 0.71 per cent to its lowest level since September 8 earlier in the session.

The broader NSE index ended higher by 39.6 points or 0.52 per cent at 7,650.05, after falling as much as 0.78 per cent earlier in the day to its lowest level since September 8.

Investors were somewhat comforted after data released late on Friday showed industrial output grew a much stronger-than-expected 9.8 per cent in October from a year earlier, its fastest pace in five years.

But India's volatility index rose to near a one-month high, showing the widespread caution ahead of the Fed's meeting, with many investors expecting the first US rate hike in nearly a decade.

"There is some comfort coming in from domestic factors. The only concern now is Fed," said G Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.

Among BSE sectoral indices, metal index was up 2.4 per cent, followed by IT 0.89 per cent, TECk 0.79 per cent and healthcare 0.71 per cent. On the other hand, realty index was down 0.19 per cent, followed by capital goods 0.15 per cent, oil & gas 0.14 per cent and banking 0.01 per cent.

Top five Sensex gainers were Hindalco (+3.01%), Coal India (+2.62%), HUL (+1.98%), Maruti (+1.97%) and M&M (+1.96%), while the major losers were Axis Bank (-2.02%), Tata Motors (-1.65%), ONGC (-0.95%), Bharti Airtel (-0.92%) and L&T (-0.77%).

Meanwhile, foreign investors bought shares worth Rs 253.73 crore last Friday, as per provisional data.

A report by SMC Global said: "Asian stocks slid the most since September amid growing anxiety over this week’s Federal Reserve interest-rate decision. US stocks closed out a volatile week with sharp losses Friday, as oil hit near-seven-year lows and another corporate merger weighed ahead of the Fed's highly anticipated decision on rates next week. Business inventories in the U.S. unexpectedly came in flat in the month of October. The report said business inventories were virtually unchanged in October after ticking up by a downwardly revised 0.1 per cent in September.

Economists had expected inventories to inch up by 0.1 per cent compared to the 0.3 per cent increase that had been reported for the previous month."

European shares opened higher on Monday as a sell-off triggered by China concerns and tumbling oil prices ran out of steam, with wind turbine makers Vestas Wind and Nordex among the leading gainers following a landmark climate deal.

The pan-European FTSEurofirst index was up 0.7 per cent by 0825 GMT, after falling more than 2 per cent on Friday.

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