The Delhi stock exchange benchmark index ended 19.70 points, or nearly 2.5 per cent up, to close at 905.32 points after crossing 907 points in mid-session.

Traders said hopes that after the release of the Indian pilot the prevailing tensions on the border are likely to recede fuelled a fresh buying spree which brought back the much needed buoyancy in the market.

Resumption of buying by FIIs, although confined to the cyclical stocks also had a positive impact on market sentiments.

Apart from FIIs and domestic financial institutions, huge buying and sizable short-covering in heavy-weighted stocks such as ITC and Reliance Industries by bear operators on the last session of the settlement also gave a push to rising stock prices. The stabilising Indianrupee at the forex market also influenced sentiments, felt some stock brokers.

"After a long gap, there was widespread buying in the core sector stocks such as cements and steel," said a DSE broker. Tata Steel remained in keen demand through out the day on frenzied buying by domestic financial institutions coupled with short covering. The stock shot up by Rs 9, or 8 per cent, to be frozen at Rs 120.