The S&P CNX Nifty Index too continued with its northward stride, gaining 31.30 points to close at 1,094.20 points. However, profit-booking at the GDR markets saw the Skindia GDR Index shed over 1 per cent to trade at 759.13 points during mid-session.

On the GDR front, ITC took a severe beating with the stock losing over $1.45 mid-session. However, cyclicals and hotel industry GDRs continued to move upwards. GDRs of Grasim, BSES, Indian Hotels and Hindalco registered gains of over 25 cents each on Monday.

Index heavyweights like Hindustan Lever and HDFC were largely responsible for the gains registeredon Monday. FII buying perked up sentiment on the bourses. On May 7, FIIs reported net purchases of Rs 257.5 crore. According to market sources, the figures reflect the warehoused deals at the SBI counter which were reported during the weekend.

Despite the huge recovery in the market indices, the net long positions on the BSE remained at a low of Rs 1,021.58 crore, a minuscule jump of Rs 88.24 crore over Friday's levels.

"An analysis of badla statistics reveals that in the week the Sensex rose by 11.5 per cent, demand for funds remained almost the same due to aggressive delivery-based buying by FIIs," said Maulik Sharedalal of Kaji & Maulik Securities, highlighting the institutional participation at the bourses.

FIIs were rumoured to have picked up chunks of scrips such as Raymond, Corporation Bank, Bank of Baroda, SBI and select pharma stocks. Pharma stocks staged a smart recovery on the back of institutional purchases. According to market sources, most of the buy orders were routed into the system onlyduring the fag end of the session, reflecting the last-minute entry of domestic speculators.

"The intra-day correction of 30-40 points from the peak was a healthy sign. Considering the FII interest in the market, the Sensex is definitely headed northwards. The FII-driven rally on Monday witnessed participation from domestic speculators which again shows that the rally should be sustained for a couple of sessions," said Ambareesh Baliga of Kotak Securities.

Besides heavyweights like HLL, HDFC, ITC and Reliance, side counters like Amar Raja Batteries, Crompton Greaves, Global Telesystems and TNPL witnessed substantial recovery on fresh FII enquiries.

Among the PSU stocks, MTNL registered a jump of over 4 per cent to close at Rs 177.50. According to brokers, the counter witnessed huge bouts of purchases during the last 15 minutes with buy orders to the tune of 40,000-50,000 pouring in at the BSE.

Infotech stocks however witnessed profit-booking with domestic institutions providing the supply. WhileInfosys Technologies registered a marginal gain of Rs 6 to close at Rs 3,224, NIIT dipped by Rs 10.75 to close at Rs 1,779.25, Pentafour Software declined by Rs 15.30 to close at Rs 1,105 and Satyam Computers registered a loss of Rs 23. Zee Telefilms shed Rs 67.50, following unwinding of positions by punters.

Cement, paper and petrochemical stocks once again witnessed a strong recovery on all-round purchases.

The negotiated segment of BSE reported huge deals at the counters of Cochin Refineries, Hero Honda, India Cement, NIIT, Shipping Corporation, Zee Telefilms and Sierra Optima.