"It is merely a technical rally. Pharma and infotech stocks have provided good leadership. It is a healthy sign that the breadth of the market has also improved and the advances and declines ratio now stands in favour of the former," said Ramesh S Damani, BSE broker.

However he cautioned that certain roadblocks could arise on account of the tussle between political ideologies and economic reforms. Interestingly, infotech and pharma counters contributed over 70 per cent of the total turnover on BSE. The exchange's turnover rose by 10 per cent to a high of Rs 1,272 crore.

FIIs, it is learnt, continued to be buyers at counters like Nestle, Grasim, Emerck, MTNL, Glaxo, Hoechst, Infosys Technologies and Satyam Computers. The market was rife with rumours that CreditLyonnais had placed a huge sell order of over 5 lakh shares at the counter of Zee Telefilms. It is learnt that the order was routed through Canbank offshore fund. However, it could not be confirmed.

Local punters took the opportunity to hammer down the stock by over 6 per cent. The stock traded at the day's low of Rs 566, before recovering towards the end to close at Rs 575.25, registering a net loss of 4.6 per cent. The stock witnessed a phenomenal volume of over Rs 275 crore on both the local bourses.

Reflecting the institutional interest, negotiated deals reported on the BSE continued to be on the rise. While at the Bata India and BSES counters demat shares were traded at a premium to the market price, counters like Bank of Punjab, Hero Honda, Hindalco, ICICI, Corporation Bank and NIIT registered huge cross deals.

Domestic institutions and FIIs were net sellers on BSE. While FIIs purchase orders were pegged at Rs 42 crore, sales were marked higher at Rs 44 crore. However,domestic institutions sold ahuge chunk of stocks worth Rs 21 crore on the BSE. According to market observers, institutions like SBI Mutual fund, LIC and UTI have resorted to profit-booking at every rise.

The announcement of the rights issue after a gap of four years saw the ACC counter register a mixed reaction. The news of the company raising funds through a rights issue, to be priced at Rs 55 (Rs 45 premium) in the ratio of 1:4, saw the scrip initially rising to the day's high of Rs 889, but later dipped to an intra-day's low of Rs 830.25 and finally close at Rs 858, registering a net loss of Rs 4 on BSE (unchanged on NSE). Volumes at the counter, however, rose sharply to touch a high of over 12 lakh shares on the local bourses.

On the GDR front, GDRs of pivotals registered marginal gains. While the ITC GDR moved up by 0.7 per cent, its premium also shot up to a high of 32.38 per cent. However, the MTNL GDR registered a fall in its premium to 32.99 per cent, from a high of 34 per cent registered on December 7.