Short-coverings by participants at lower levels, recovery in rupee and firm global cues helped the Sensex bounce back after yesterday's 630-point plunge.
The upside was also supported by gains related to inclusion of some stocks in MSCI India index.
MSCI Inc announced that eight companies including Bharti Infratel, Eicher Motors, Lupin and Bharat Forge will be added to the list.
At present, companies such as Infosys, HDFC, TCS, RIL, Sun Pharma and ITC are part of MSCI India index.
Retail inflation, which cooled to a four-month low in April and industrial output growth slipped to a five-month low in March, increased changes of an interest rate cut by the Reserve Bank at its next meeting.
"Latest CPI trajectory provides scope to cut rate by the next RBI meet in June 2. This is likely to provide a support to the range-bound correction led by FIIs due to global factors," said Vinod Nair, Head of Fundamental Research at Geojit BNP Paribas Financial Services.
In volatile movements, the 30-share Sensex opened firm and regained the crucial 27,000-mark to touch the day's high of 27,299.80 led by gains in rate-sensitive stocks.
On emergence of profit-booking it slipped into negative zone to touch day's low of 26,750.01.

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