The Sensex, which had touched 40-month low levels in the previous day's trading, turned volatile before ending with a gain of 127.90 points to 8,325.82. It moved between 8,347.74 and 8,047.17 points during the day.

The 50-share Nifty of the NSE rose by 43.45 points to 2,620.15, after touching a high of 2,628.10 and a low of 2,539.25.

Trading activity in information technology gathered momentum after the dollar surged to a record high against the Indian rupee, brokers said.

The IT sector index gained the most by rising 3.05 per cent to 2,072.32, led by a steep rise in Infosys, a heaviest on the index.

Infosys, the second-largest software exporter, gained 3.08 per cent to Rs 1,219.20 as the rupee headed for its third weekly drop. Tata Consultancy Services, the largest, added 3.84 per cent to Rs 480.80, and Wipro, the third-biggest, by 3.37 per cent to Rs 213.20.