During the first phase of trading session, HLL scrip provided the much needed trigger point for the 30-share Sensex to breach the crucial barrier of 3,300 points. Sensex closed at 3,307.49 points registering a net gain of 99.28 points. The Skindia GDR index, however, registered a marginal improvement to trade at 583.76 points at 12 GMT on the London Stock Exchange.Brokers described the upsurge as a pre-budget rally, influenced by the positive news of the fiscal deficit within control and much below 6 per cent levels. However, considering the sharp recovery made by specific index-based stocks, market was agog with rumours that the domestic institutions have once again been asked to play the role of `saviour' to bail out the government.

UTI was rumoured to have made its presence felt at counters like IPCL, MTNL, SBI and ACC.Interestingly, LIC was rumoured to have sold heavily at the counters of HLL, in a bid to book profits. It may be recalled that the institution was said to have made an entry at the HLL counter at Rs 1,600 levels. On Wednesday, HLL touched an all-time high of Rs 2,033 on the BSE, which provided an adequate exit point for the domestic institutions. Market was agog with rumours that DSP Merill Lynch bought a huge chunk of HLL during the first phase of the session.

"Local institutions sold at HLL and Tata Tea to utilise that portion of the profits to buy heavy weight stocks like ITC, Bhel, MTNL, SBI and Reliance, " explained a veteran BSE broker.

Rumours of Tata Tea to reward the investors with a 1:1 bonus helped the stock breach the crucial barrier of Rs 400 to be locked at the upper limit of the price band at Rs 424.75. The counter clocked a phenomenal volume of 32.03 lakh shares. Similarly, other heavy weight stocks like Bhel, IPCL and Mahindra & Mahindra also hit the upper limit of the circuit on thelocal bourses.

Among the FIIs, Credit Lyonnais reported a cross deal of 20,000 shares at the Tata Infotech counter. The deal was reported at Rs 1,615. Morgan Stanley also reported a phenomenal deal of 13.56 lakh shares of Reliance Petroleum on the negotiated segment of the BSE. Domestic brokerage houses reported huge deals at the counters of Reliance, L&T, Telco and Essel Packaging.Interestingly, after hitting a new low of Rs 57.30 on Friday Gail today shot up by 8 per cent to be locked at Rs 59.85 on the NSE. However, VSNL was today hammered down to a low of Rs 681.90 net loss of Rs 16.10. Its GDR also shed 0.78 per cent to trade at $ 9.60. Similarly, other PSU stocks like HPCL, BPCL and IOC continued their downward journey for the third consecutive session.