The Sensex opened on a firm note at 3,277.93 points, helped by huge buying in the shares of HLL -- a heavyweight index stock with a weightage of 18.83 per cent -- MTNL, Telco and software stocks. The market gained 101.52 points to touch an intra-day high of 3,347.40 points from the day's low of 3,277.93 points, which was also the opening level.

Provisional figures collated by NSE show that FIIs were net sellers today at Rs 5.12 crore. So also were domestic institutions and mutual funds at Rs 9.80 crore.

"The market continued to be firm and has been gaining momentum asthe sentiment has been firming up. The damage that the government had done is now being repaired," said BSE broker Ajai Sodhi.

"There are two factors helping the bourses: one, the selling pressure from FIIs has subsided. In fact, on Wednesday the FIIs were buying in selective counters. The second reason is that many of these pivotals are in no-delivery period which will end in mid-July, so investors are building long positions in the pivotals leading to an upsurge in the index," said Pranav Securities' institutional sales manager Parag Dalvi.

Also, the market provides attractive valuations at current levels and with no negative news coming across there has been a marked improvement in the Sensex, brokers said.

"It has been a long time since such volumes were witnessed across the board. The true position will be visible on Friday if the bull run tapers off, then it will be seen that inherently the market is still in a bear phase," said Shailesh Merchant Brokers vice-president Dilip Bhat.

"The FIIs havebought GDRs worth US $125 million and the reflection can be seen in the Indian market now. In the GDR market also they are buying in the pivotals which is being mirrored here," said a BSE broker.

Schroders was tipped to have been buying Pentafour Software, MTNL and HLL. There was an order to purchase 1.5 lakh shares of HLL by Schroders. Some offshore funds were buying ITC, Zee Telefilms and Telco.

The index stocks which moved up were MTNL, which gained 8 per cent to end at Rs 200.50; Telco (8 per cent at Rs 172.70 and was frozen on both the exchanges) and ACC (4.77 per cent at Rs 1,323.25). HLL was the index mover today on huge buying by FIIs. The scrip closed at Rs 1,608 against the previous close of Rs 1,557.75. ITC gained 3 per cent to close at Rs 693; L&T closed at Rs 235.30, up 6.4 per cent.

On the NSE, L&T gained 5.53 per cent to close at Rs 233; HLL gained 2.72 per cent (Rs 1,599.75); ACC gained 3.65 per cent (Rs 1,306.20); Telco gained 7.99 per cent (Rs 175) and MTNL gained 6.92 per cent (Rs201.65).

Infosys, an FII favourite, closed lower at Rs 2,489.50 due to profit-booking. NIIT closed lower at Rs 1,520 while Pentafour Software ended higher at Rs 685.50.

Videocon International moved up by 7.82 per cent on the BSE to close at Rs 54.45 while Sterlite gained 1.36 per cent to close at Rs 185.90.