The National Stock Exchange of India (NSE) and BSE will remain closed on October 5 on account of Dussehra.
Wholesale commodity markets, including metal and bullion, will also remain shut. There will be no trading activity in the forex and commodity futures markets either.
On October 4, the Sensex was up 1,276.66 points or 2.25% at 58,065.47, and the Nifty was up 387 points or 2.29% at 17,274.30.
IndusInd Bank, Adani Ports, Coal India, Hero MotoCorp and Bajaj Finance were among the top gainers on the Nifty. Power Grid Corporation and Dr Reddy's Laboratories were the top losers.
All sectoral indices ended in the green, with Nifty Bank, Auto, Metal, Information Technology, Energy and PSU Bank rising 2-3 percent.
The BSE midcap index added 2.4 percent and the smallcap index rose 1.5 percent.
"Markets recovered strongly after Monday’s slide and gained over 2%, tracking firm global cues. The Nifty index opened gap up and gradually inched higher as the session progressed and finally settled around the day’s high to close at 17,274.30 levels," said Ajit Mishra, VP - Research, Religare Broking.
"All sectoral indices participated in the move wherein metal, banking and IT were among the top gainers. The broader indices too witnessed decent traction and gained in the range of 1.7-2.5%.
"Markets are currently dancing to the global tunes and the rebound in the US markets has triggered this bounceback. Going ahead, Nifty should hold the 17,200 mark to maintain the positive bias and inch towards the 17,400 plus zone. We reiterate our view to focus more on stock selection and risk management citing excessive volatility."
Indian rupee closed 35 paise higher at 81.52 per dollar on Tuesday against previous close of 81.87.
“USD-INR spot closed at 81.52, down 35 paise, due to the fall in the US dollar index and pullback in US yields. Rally in stocks also helped," said Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives, Kotak Securities."Over the near term, US economic data like ISM services and US NFP report will provide direction. We expect a range of 81.20 and 82.00 on spot,” he added.