Indian shares erased losses from the last two sessions to settle more than 1 percent higher on Tuesday, as U.S. treasury yields edged up, easing concerns of a recession in the world's largest economy.
The benchmark BSE Sensex settled 1.12 percent higher at 38,233.41. The broader NSE Nifty rose 1.14 percent to 11,483.25.
Financial stocks accounted for half the gains, with Nifty Bank index closing 2.05 percent higher.
IT stocks were the only losers, with the Nifty IT index ending 1.29 percent lower.