Led by the recovery witnessed by the auto sector representatives, the BSE-30 share Sensex index rebounced from an intra-day's low of 3,062.05 to close at 3,133.42 registering a net gain of 13.88 points. In the meanwhile, the S&P CNX Nifty index on the first day of the trading cycle closed at 907.45 points registering a net gain of 1.25 points.

According to market sources, Telco has been on the buy list of leading FIIs and UTI, which led to a sharp recovery in the stock from a low of Rs 127 to record an intra-day's high of Rs 142, where the stock was locked on the BSE.

Interestingly, the market was agog with rumours that the company has decided to sell off its small car project `Mint' to Mercedez Benz for a high price. Thisaccording to market players could help the company tide over its financial problems and report an improved performance in the next quarter.Even though an official version of the sale strategy was not announced by the company, punters continued to make huge positions at the counter which saw the long positions jump from 10.53 lakh shares registered on August 4 to 11.12 lakh shares on August 5 on the BSE.

The Telco counter witnessed a phenomenal volume of over 30 lakh shares exchanging hands on the local bourses. At the close of the session, the counter recorded a total buying depth of 6.25 lakh shares.

Indications that despite the GDR market indices being down, continuous inflow of buy bids for Telco were received at a premium of $ 0.50, helped improve the sentiments further.

``Telco attracted a contango charge of a meagre 25-30 paise on August 1, which provided indications of syndicated approach to press short sales at the counter,'' stated a BSE broker, emphasising the role of leading brokerage housesin the hectic activity at the counter, which could lead to a phase where short sellers could be trapped. In the meanwhile, Tata Tea moved up sharply from the day's low of Rs 291.10 to breach the crucial barrier of Rs 303, and closed at Rs 305.10 registering a smart recovery of 1.66 per cent.