The NSE Nifty 50 index ended 2.19% higher at 15,245.60, while the S&P BSE Sensex closed 2.28% higher at 51,444.65.
Investor mood across the globe was also positive with MSCI's broadest index of Asia-Pacific shares outside Japan adding 1.7% and the Euro STOXX 600 rising 0.7%.
The blue-chip NSE Nifty 50 index shed 3.76% to close at 14,529.15, while the benchmark S&P BSE Sensex ended 3.80% lower at 49,099.99.
Panic in global bond markets led to sharp rise in yields which spooked investors...the market correction might continue for some time till inflation fears ease down.
In Mumbai, a two-session rally in financial stocks was set to end, with the Nifty private bank index and the Nifty PSU bank index falling 2.9% and 2.5%, respectively.
The NSE Nifty 50 index ended 0.77% higher at 15,097.35 and the S&P BSE Sensex closed up 0.51% at 51,039.31, ahead of December-quarter gross domestic product data due on Friday.
Reliance, which fell 3.5% on Monday, has since recovered and is up more than 4% so far this week.
The NSE Nifty 50 index ended 1.86% higher at 14,982.00, while the S&P BSE Sensex rose 2.07% to 50,781.69.
The top three boosts to the Nifty 50 were financial and banking stocks, which surged in extended trading, pushing the Nifty private bank index higher by 3.9%.
There is no positive news in the near term to propel markets higher and we may continue to see such sedate moves until there are fresh triggers that will decide which way market will move going-ahead.
Reliance Industries was the top boost to the Nifty 50, closing up 0.8% after the conglomerate said it expected to hive off its oil-to-chemicals (O2C) business in the September quarter.
*The NSE Nifty 50 index ended 2.04% lower at 14,675.70, clocking its biggest one-day drop since Dec. 21. The S&P BSE Sensex closed down 2.25% at 49,744.32.
* There is a round of profit-booking that is still happening ... valuations remain high and we are seeing a consolidation.
On the Nifty 50, lenders Housing Development Finance Corp , Axis Bank and state Bank of India were among the top five drags, falling between 0.8% and 1.5%.
Separately, the Nifty PSU bank index that tracks state-run lenders jumped 2.82% after Reuters reported that the government had shortlisted four banks for potential privatisation.
Among individual stocks, State Bank of India was set to gain for a sixth straight session following well-received quarterly results. The stock has jumped 46% so far in the last eight sessions.
The NSE Nifty 50 index ended up 0.19% at 14,924.25, having risen as much as 0.8% earlier in the session, while the S&P BSE Sensex gained 0.23% to close at 50,731.63.
State Bank of India's shares surged 15% to a record high, after it beat analysts' profit estimates on Thursday.