Markets ended up marginally, after recovering from the lows of the day.
The Sensex touched a high of 18,527 in morning trades on the back of strong FII investmenets.
However, weakness in oil & gas and FMCG stocks, dragged the index down 204 points from the high to an intra-day low of 18,323.
Thereafter the Sensex recovered to finally end at 18,492 -- up 80 points.
The Nifty ended up 19 points at 5,545.
"Nifty has taken strong support around 5180 levels and recovered back smartly led by heavy buying from FIIs.
"Now 5550-5600 area is likely to act as a major hurdle as it failed to cross these levels 9-10 times in last five months," said Chandan Taparia, Derivative analyst, Anand Rathi Financial Services.
According to recent data, FIIs have bought shares worth Rs 1,505.50 crore since June 23.
Global markets were also traing in the positive zone. The Nikkei gained 0.7% at 9,649. Hang Seng and Shanghai Composite were flat at 22,062 and 2,759, respectively.
Markets are likely to be choppy ahead of the derivatives expiry on Thursday when traders would be rolling over their positions.
The probablity of the end of the QE2 this week, may also weigh on the markets.
BSE oil & gas index dropped 0.5% to 9,130. Realty stocks also declined.
Gail India was the biggest loser among oil & gas stocks and shed 2% at Rs 447.
Oil Marketing companies -- HPCL, BPCL and IOC dropped 1.5-2% each.OIl India was down over 1% at Rs 1,338.
Market heavyweight, Reliance Industries ended flat at Rs 871. RIL's advance tax payment reportedly jumped 38.46% to Rs 900 crore in Q1 June 2011 over Q1 June 2010.
Analysts expect higher profit for the period under review.
Among realty stocks, PhoeniX Mills slipped 2.5% to Rs 188. DLF dropped 2.2%, followed by Orbit Corp and Indiabulls Real Estate.
However, metal stocks rose on bargain hunting.
Hindalco surged 4% to Rs 181. Welcorp gained 5% at Rs 169. Jindal Saw, Sterlite and NMDC added around 1% each.
"The immediate resistance for Hindalco would be at 179. Only post a sustained close above 179 the stock can test 191.
"Sterlite to find its first natural resistance near its 200 Day EMA of 171. As for metals as sector, it is most likely to underperform the broader market," said Ranak Merchant, Technical Analyst - Strategies, Sushil Financial Services.
Oil & Natural Gas Corporation gained to a high of Rs 289 but ended flat after reports came out suggesting the firm's board will clear the prospectus for the company's upcoming follow-on public offer at a meeting on Tuesday.
The government, which holds 74% of ONGC, plans to sell 5% of its stake to raise funds.
BSE capital goods, healthcare and consumer durables gained 1% each in trades today. The auto, power and bankex were up 0.5% each.
Cairn India fell 2% during the day after UK-listed India-focused miner Vedanta Resources and Cairn Energy on Monday announced that they had tweaked the terms of the deal for Vedanta's acquisition of stake in Cairn India from Cairn Energy that has resulted in a lower deal price.
The stock ended at Rs 307 with a loss of 0.5%.
Markets will also look towards the Quarter 1 results for direction. HDFC would kick start the result season on July 8, 2011.
Markets ended up marginally, after recovering from the lows of the day.