Buying by funds, both domestic and foreign, and local operators buoyed share prices across bourses. The Sensex closed the day at 3,401.74 points, after touching a high of 3,409.50 points and a low of 3,344.09 points. FIIs, who have been net buyers for the past few days mainly due to the attractive valuations available at current levels and positive results expected from corporates, were reported to be buying on Friday as well.

"A fresh lease of life has been infused into the markets with the overall sentiment improving, triggered by an improved political situation, good corporate results and dilution of the impact of sanctions combined with the fact that the slew of negativenews has stopped trickling in," BSE broker Ajai Doshi said. Market participants said that the US' move to exempt loan guarantees for food and agricultural commodities has lifted market sentiment. However, it remains to be seen whether the market would sustain itself at these levels. "The market will remain rangebound and it is unlikely to come out of this groove. This is because there are not enough positives to sustain the market at higher levels. Also, the market cannot be hammered beyond a certain limit as it is not a bottomless pit and at 3,000 levels the valuations are very attractive," said Pranav Securities president Rajesh Jain. Software stocks and pivotals were in the limelight again following buying by FIIs and local institutions like UTI and LIC. Foreign funds, which have been aggressive buyers in software stocks, were reported to be buying in the counters of Satyam and Pentafour. Morgan Stanley was reported to have bought BASF on Friday. FIIs like Oppenheimer and GMO, a Hong Kong-based fund, hadshown interest in SBI, Bhel and L&T.