Among the top Nifty gainers were Tata Steel, Hindalco Industries, ONGC, Tata Motors and ICICI Bank.

Due to early losses in the European markets, the benchmark BSE Sensex and NSE Nifty retraced all intra-day gains to close the last trading day of the year on a negative note.

Taking favourable cues from the other Asian markets, the domestic equity markets gained momentum and traded substantially in green, breaking the losing streak of the previous two trading sessions. The oil market, still driving a roller coaster ride with the prices, moved up and down sharply.  

BSE Small-cap index outperformed broader markets, closing the session with gains of 0.27 per cent.

On Wednesday, Indian equity markets staged a healthy recovery from lower levels.