Brent, the global oil benchmark, on Tuesday fell as much as $53.95 a barrel as traders weigh the impact on global demand from the spread of coronavirus, which has probably cut China's oil consumption by 20 per cent, according to analysts.
China is the largest importer of crude oil in the world, while India also imports over 80 per cent of its total oil requirements.
HeroMotoCorp, ITC, HDFC Bank, ICICI Bank and Reliance Industries were the top gainers on the Sensex.
At 2.43 p.m., the benchmark Sensex traded at 40,724.03, higher by 851.72 points or 1.802.14 per cent. The Nifty gained 253.30 points to trade at 11,961.20.
Asian markets traded higher on Tuesday after a recovery in Chinese stock markets. Shanghai Composite Index fell over 8 per cent on Monday. Investors reacted to the Coronavirus-related deaths which has crossed 400 in China.
Besides, IHS Markits said that the Manufacturing PMI index which rose from 52.7 in December jumped to 55.3 in January, its highest level in just under eight years.
The consumer goods sub-sector, the survey said, remained the brightest spot, although growth was sustained in intermediate goods and capital goods moved back into expansion.
"Companies noted the strongest upturn in new business intakes for over five years, which they attributed to better underlying demand and greater client requirements," it added.
Meanwhile, provisions data from the exchanges showed, foreign institutional investors sold equities worth Rs 1,200.27 crore on Monday, while domestic institutional investors purchased shares worth Rs 1,286.63 crore.
( With inputs from IANS )