The benchmark Sensex pared its early surge, though settled near five month highs following buying in key index heavyweights of Banks and Financials propelling the market, while Nifty held above 8,800-level.
The market opened gap-up despite weak trend in other Asian markets following buying spree in key private financials after FII limit for its largest constituent has been opened by the RBI taking index to zoom nearly 424.73 points in early trade.
HealthCare, Financials, Oil and Gas, Banking, Energy and Consumer Durabled lifted the market only to capped by profit- booking in IT, Teck, Metal, Telecom and Auto segments.
While, broader midcap and smallcap companies shares also fetched moderate gains.
HDFC banks shares which jumped as much as 9.5 per cent record high early morning only to washed-out as Central Bank again put back in the FII ban list for crossing overall limit of 74 per cent.
Healthcare stocks gained sharply, with shares of Sun Pharma bounced back rising over 4 per cent, on value buying and its subsidiary receiving approval for Tobramycin from the European Medicines Agency.
However, shares of Idea Cellular and BHEL fell by upto 6 per cent today after announcement of removal from National Stock Exchange's Nifty 50 index from March 31.
While, their replacement of India bull-housing finance and Indian Oil Corporation gained 2.70 per cent and 2.20 per cent respectively.
The 30-share Sensex, after opening gap-up at 28,670.43 moved between high of 28,726.26 and low of 28,410.91 before closing at 28,468.75. showing a gain of 167.48 points or 0.59 per cent. (The Sensex last closed at 28,668.22 on September 23,2016).
The gauge had gained 145.71 points yesterday.
The 50-share NSE Nifty gained 43.70 points or 0.50 per cent to 8,821.70, it shuttled between 8,896.45 and 8,804.25.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 215.69 crore yesterday, as per provisional data released by the stock exchanges.
Overseas, Asian markets declined following a pullback overnight in two major US stock indexes from record levels.
Wall Street stocks finished mixed yesterday.
Shanghai Composite Index lost 0.85 per cent, Japan's Nikkei fell 0.58 per cent, Hong Kong's Hang Seng by 0.31 per cent and SC South Korea by 0.06 per cent.
European markets were lower in afternoon trade, Paris CAC 40 shed 0.64 per cent, Frankfurt by 0.28 per cent, London's FTSE fell 0.25 per cent,
BSE mid-cap and small-cap indices ended 0.53 per cent and 0.40 per cent higher, respectively.
Out of the 30-share Sensex pack, 15 scrips ended higher.
Major gainers were Sun Pharma (4.03 per cent), HDFC Bank (3.75 per cent), Cipla (1.58 per cent), Tata Motors (1.53 per cent), ICICI Bank (1.52 per cent), Gail (1.41 per cent), Lupin (1.23 per cent) and Reliance (0.98 per cent).
However, TCS fell by 1.58 per cent, Hero MotoCorp 1.29 per cent, Infosys 1.21 per cent, Wipro 1.10 per cent, Asian Paints 0.91 per cent and Maruti 0.63 per cent.
Among BSE sectoral indices, healthcare rose by 1.64 per cent, oil&gas 1.38 per cent, finance 1.24 per cent, bankex 1.21 per cent, energy 1.07 per cent, consumer durables 0.45 per cent, utilities 0.44 per cent and industrials 0.42 per cent.
However, IT fell by 1.02 per cent, followed by teck (0.86 per cent), metal (0.68 per cent), telecom (0.30 per cent) and auto (0.06 per cent).
The market breadth remained positive as 1,424 shares ended higher, 1,388 closed lower while 206 ruled steady.
The total turnover on BSE amounted to Rs 3,742.33 crore, higher than Rs 2,618.23 crore registered during the previous trading session.