Mumbai: The BSE benchmark index Sensex on Tuesday rebounded by over 177 points in early trade on buying by funds and retail investors at lower levels, amid a firming trend on other Asian bourses.

The 30-share BSE index, which had lost almost 309 points on Monday, rallied by 177.56 points, or 1.01 per cent, to 17,230.34, with all sectoral indices, led by realty and metals, trading in the positive zone with gains of up to 1.71 per cent.

The wide-based National Stock Exchange index Nifty moved up by 48.80 points, or 0.94 per cent, to 5,233.05.

On Monday, both the indices had registered steep fall amid market speculations that the government may tax participatory notes (P-notes) of foreign investors for buying Indian equities.

Brokers said fresh buying by funds and retail investors, in line with a firming trend on other Asian bourses, following overnight gains in the US stocks, boosted the trading sentiment here.

In the Asian region, Hong Kong's Hang Seng Index rose by 1.32 per cent and Japan's Nikkei Index by 1.34 per cent in morning trade on Tuesday. The US Dow Jones Industrial Average ended 1.23 per cent higher in Monday’s trade.