Closing Bell: Sensex rebounds 1,059 points from day's low, Nifty50 reclaims 17,300; VIX down 2%

: Nifty50 defends 200 DMA boldly

The 30-scrip index rebounded 1,059 points from its intraday low.

Among blue-chip stocks, Tech Mahindra, Bharat Petroleum, Tata Motors, Reliance, Bajaj Finserv, ITC, Indian Oil and TCS -- closing between 2.2 percent and 4.2 percent higher -- were the top gainers. On the other hand, Hindustan Unilever, Nestle, Britannia and Cipla, falling between 1.6 percent and 2.9 percent, were the worst hit among the eight laggards in the Nifty50 universe.

Reliance Industries, Infosys, TCS and ICICI Bank were the biggest movers for both Sensex and Nifty, contributing more than 400 points to the gain in the 30-scrip index.

"The domestic market started with a negative bias taking cues from rising crude prices and hawkish signals from Fed on aggressive policy tightening. However, the trend reversed as European markets opened on a positive note buoyed by hope that Ukraine may consider working towards a truce," said Vinod Nair, Head of Research at Geojit Financial Services.

The Nifty IT rose the most among NSE's sectoral gainers, closing two percent higher.

Gains across most BFSI stocks helped the banking and financial services gauges finish the day with gains of almost one percent.

Stocks of state-run oil marketing companies Indian Oil, BPCL and HPCL jumped 1.5-3 percent, after the three raised the retail prices of petrol and diesel after a gap of more than four months. 

Broader markets also recovered their intraday losses in the afternoon, with the Nifty Midcap 100 and Nifty Smallcap 100 indices finishing 0.3 percent higher each.

In the midcap and smallcap segments, top gainers were Chalet Hotels, Ratnamani Metal, Mahindra Holidays and Schneider, rising around 8- 13 percent. Caplin Point, IDFC First Bank, Future Retail and Wockhardt, falling 3-15 percent, were among the top losers.

Overall market breadth was largely neutral with a negative bias at the close, as 962 scrips rose and 1,080 fell on NSE.

The India VIX -- known in market parlance as the fear index -- eased 2.2 percent to settle at 24.1, having risen to as high as 25.2 during the session.

European markets began the day in the green on the back of gains in the banking space on the prospect of aggressive rate hikes following hawkish comments from Fed Chairman Jerome Powell. The pan-European Stoxx 600 index was up half a percent at the last count.

S&P 500 futures were up 0.3 percent, suggesting a positive start ahead on Wall Street.

"The Nifty50 took support at its 200-day simple moving average near 17,000 and reversed quickly. It also formed a long bullish candle on the daily chart, which is broadly positive," said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

He believes the 50-day moving average near 17,200 will now act as a trend decider level for traders.