While mixed cues from Asian markets and concerns about the economy weighed on sentiment early on in the session, a firm start in European markets triggerd some strong buying in late afternoon trades.

The BSE benchmark Sensex, which eased to 17,038.59 around mid morning, ended the day with a gain of 79.71 points or 0.47% at 17,185.01. The Nifty index of the National Stock Exchange settled at 5216.30, nearly 50 points off the day's low of 5169.05, recording a gain of 23.45 points or 0.45%.

Metal, capital goods and realty stocks moved higher. Automobile, power and information technology stocks also found good support in late afternoon trade. Select bank stocks ended on a firm note.

FMCG, consumer durables, healthcare and oil stocks closed on a mixed note. Midcap and smallcap stocks were mostly subdued. The market breadth was almost even.

Bajaj Auto started off on a weak note with investors treading cautiously ahead of announcement of results, but rallied sharply after quarterly numbers fell in line with expectations. The stock ended with a strong gain of 5.2%.

Bajaj Auto posted a net profit of Rs 718.39 crore for the quarter ended June 30, 2012 as compared to Rs 711.06 crore for the quarter ended June 30, 2011. Total income increased from Rs 4850.38 crore for the quarter ended June 30, 2011 to Rs 5047.63 crore for the quarter ended June 30, 2012.

Maruti Suzuki, Tata Power, Jindal Steel and Sterlite Industries gained 2.3% - 2.75%. ICICI Bank, Larsen & Toubro, BHEL, Coal India and Tata Steel moved up by 1.2% - 1.7%.

Hero Motocorp, Tata Consultancy Services, HDFc, HDFC Bank, Hindalco, Wipro and ONGC also closed on a firm note.

Sesa Goa ended nearly 3% up. Reliance Infrastructure notched up a gain of 2.3%. DLF, SAIL, Axis Bank, ACC, Grasim Industries and Ambuja Cements also ended with smart gains.

Punjab National Bank ended nearly 3% down. Bank of Baroda, Tata Motors, Dr Reddy's Laboratories, Ranbaxy Laboratories, Cairn india, Cipla, Power Grid Corporation, Reliance Industries, Jaiprakash Associates and State Bank of India closed with sharp to moderate losses.

Bajaj Finserv extended gains on strong results. Cadila Healthcare too had another good session. GTL Infra and Reliance Media Works moved up sharply on stock specific stories.

According to the data released by the government on Wednesday, provisional annual inflation rate based on all-India general consumer price index for June 2012 on a point-to-point basis stood at 10.02%. The corresponding inflation rates for Rural and Urban areas are 9.74% and 10.44%, respectively for June 2012.

All-India provisional General CPI numbers of June 2012 for Rural, Urban and Combined are 120.6, 118.5 and 119.7, respectively. Inflation rates (final) for Rural, Urban and Combined for May 2012 stood at 9.57%, 11.52% and 10.36%, respectively.