According to brokers, the index breached the crucial barrier of 3,435 points on account of institutional support at index-based counters like Reliance, SBI and MTNL among others.

The net long positions on the Bombay Stock Exchange witnessed a marginal increase of Rs 35 crore to touch the Rs 1,000-crore mark. The gross short positions, however, shot up to touch a high of Rs 462 crore. According to brokers, the FII interest in the market has been reflected in the slow and marginal rise in the long positions at the exchange.

Based on the net long and short figures released by the BSE on Tuesday evening, the market was agog with rumours that institutions havebeen net buyers at the counters of HPCL, L&T, ICICI, Reliance, Tisco, Sterlite, Gujarat Ambuja and Zee Telefilms. HLL, however, continued to remain quiet for the third consecutive session. The stock closed at Rs 2,035.10, registering a meagre gain of 0.99 per cent, with 64,700 shares changing hands.

"Corporate results also helped improve market sentiment and the political factors eventually got discounted," explained a BSE broker.

Renewed buying interest at infotech counters was a prominent feature of the day. Meanwhile, dark horses like Reliance, SBI and Telco were back in the limelight as institutions, both domestic and foreign, flocked to these counters to pick up huge chunks at lower levels.

The list of top five traded stocks on the BSE included Reliance Industries, SBI, Tisco and LT, which by recent standards, is considered as a remarkable achievement. While Reliance clocked a phenomenal volume of over 1.7 crore shares between the two exchanges, the SBI counter witnessed a volume of over 70 lakhshares and Tisco over 50 lakh shares. Reliance was locked at the upper limit of the price band at Rs 145.25 on the NSE.

"The scale of FII interest, despite the ongoing political uncertainty, is certainly very reassuring. The fact that buying intent has spread to a host of cyclical stocks as well seems to suggest that despite polls being announced for September, the Sensex may not even react to test its recent low of 3,180 levels," said Kaji & Maulik Securities director Maulik Sharedalal.

A similar bull run was witnessed at the GDR markets also with GDRs of ITC, Gujarat Ambuja, SBI, ICICI and Bajaj Auto registering gains of over 6 per cent on an average. While ITC breached the crucial barrier of Rs 1,000 on the domestic front, its GDR was traded at $29.27, registering a net gain of 3.17 per cent over Monday's close on the London Stock Exchange. Similarly, the GDR of L&T traded at a premium of over 10.65 per cent over its previous day's close of $10.25. Its underlying stock closed at Rs 219.45, registeringa net gain of 7.57 per cent.