The index opened at 3,572.96 points to move in a narrow band of 3,483.81 to 3,600 points, the day's low and high respectively, to finally close at 3,597.98 points. The intra-day fall of 89.15 points and subsequent net gain of 25.02 points is being seen by the market players as a reversal in trend.

The NSE Nifty Index moved up by 14.30 points to close at 1,033.90 points as against Tuesday's close of 1,019.60 points. Some BSE brokers predict the Sensex to shoot up by at least 60 points on Thursday.

Buy-back has been the weapon of speculation for sometime now. In the pre-budget session on Monday, speculators built up huge positions on the hope that the budget will announcebuy-back of shares. The budget was silent on the issue and the Sensex dipped in the post-budget session. On Wednesday, the revenue secretary's statement led to the belief that an ordinance on buy-back of shares would come soon. However, an ordinance cannot be issued by the government while the parliament session is on.

According to a PTI report, the fresh interest from operators resulted from finance secretary Montek Singh Ahuwalia's reported assurance in an interview to a private TV channel that the buy back of shares would be announced on a priority basis. Support from domestic financial institutions like UTI and LIC, mostly for pivotals, also saw the index move up in the latter half of the trading session. FIIs, however, continued to be net sellers on the bourses on Wednesday.

"The intra-day movement of the Sensex is a pointer to the direction the market is expected to look in over the next couple of days. The post-budget blues are subsiding and the market might be starting to take heed that the unionbudget was actually pro-reform and pro-growth in addition to the current euphoria over buyback of shares," said Kamal Kumar Jalan, a BSE broker.

"The market saw an upturn today also because of the impact of Samadhan sinking in. There is around Rs 64,000 crore which is blocked up in litigation and through this the government would go in for one-time settlement with corporates saving on interest payment and other expenses. Even if the government garners say Rs 5,000 crore, that will be a huge help in the government deficit," said the Apple Mutual Fund's senior manager (equity research), Hitesh Zaveri.

The market witnessed a lot of buying in pivotals like ITC, HLL, SBI, L&T, Reliance and others. ITC closed at Rs 663.75 as against the previous day's close of Rs 649. Reliance closed at Rs 166.20. SBI also witnessed a lot of action, closing at Rs 216.20, much lower than the previous close of Rs 229.80. Software stocks were very volatile throughout the day. Dealers were apprehensive on how the FIIs would reacton these counters since they have built up huge positions in many infotech stocks. Tata Tea shot into the limelight following rumours that a bonus issue was on the cards.

The GDR market closed at 700.89 to lose 1.76 per cent over the previous day's close of 713.46. The GDR market is witnessing an interest in infrastructure stocks like BSES and L&T.

ITC was trading at Rs 668-669 on the kerb as against its official close of Rs 664. Tata Tea was trading at Rs 346 as compared to the official close of Rs 340.