The Sensex and the Nifty ended the session marginally in the green amid weak European cues.

The 30-share BSE index Sensex rose 116.32 points or 0.43 per cent at 27,206.74 and the 50-share NSE index Nifty gained 24.85 points or 0.31 per cent at 8,146.30.

Rajesh Agarwal, Head-Research, Eastern Financiers, in a report said: "Going forward, the Sensex earnings multiple at 17 times FY15 earnings looks a bit stretched, and investors would be better off being cautious as the near term upside looks a little difficult. Some reforms have taken place but the quantum of impact on the bottom-line of corporates needs to be seen. Hot money, lower crude prices, monsoon not turning out to be as bad as was earlier expected, are some of the factors that are driving the markets. While we believe that markets could witness correction in short-term, earnings expansion, government initiatives towards infrastructure and strengthening economic data, provide comfort on the medium-term. We strongly believe that the Government’s pro-growth approach will aid the revival in the economy and would in turn boost equity markets."

Among BSE sectoral indices, consumer durables, FMCG, auto and oil & gas indices were the star-performers and were up 3.12 per cent, 1.9 per cent, 1.1 per cent and 0.88 per cent, respectively. On the other hand, metal index fell the most by 1.22 per cent, followed by healthcare 0.89 per cent and India infrastructure 0.87 per cent.

Tata Motors, ONGC, ITC, Hero MotoCorp and SBIN were the major Sensex gainers, while the major losers were Cipla, BHEL, Tata Steel, Hindalco and Infosys.

Concerns over a slowdown in China hammered stocks and commodities on Monday, while signs of differences between major economic powers on the need to stimulate growth further clouded the outlook.

Asian shares fell as investors worried a key measure of Chinese manufacturing, due on Tuesday, could indicate activity was contracting.

The slide was carried over into Europe, where fears over Chinese demand hit miners' shares. A further profit warning from British supermarket Tesco, whose shares fell 8 per cent, also took its toll.

Adding to the sense of gloom in markets, Group of 20 finance ministers and central bank chiefs meeting in Australia at the weekend said they were close to adding $2 trillion to the global economy, though there were signs of disagreement.

The Stoxx Europe 600 Index dropped 0.3 per cent to 347.48 at 10:02 a.m. in London after earlier falling as much as 0.6 per cent. Standard & Poor’s 500 Index contracts slid 0.5 per cent, while the MSCI Asia Pacific Index retreated 0.8 per cent.

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