Traders said that the new volatility margins - where the imposition of margins begin at 60 per cent volatility instead of 40 per cent but with stiffer margins at higher levels of volatility - also had some impact on the trading volumes by putting a curb on brokers' positions. "This ensures that no single broker or a group of brokers goes overboard in taking up positions in any scrip," said a broker.

Impressive rally in Infosys, Reliance and HLL helped the Sensex record an intra-day gain of nearly 160 points touching a peak of 5583.22 points. It opened at 5529.38 points. The Sensex lost much of its initial gains due to a sharp setback in heavyweighted scrips such as Tisco, Telco, ITC, L&T, Hindalco and Mahindra & Mahindra. While institutionsbought up certain software stocks - such as Global Telesystems, Wipro, Silverline Industries, NIIT and Infosys among others - they were sellers at high levels on stocks of public sector units such as MTNL, Bhel and State Bank of India, among the bank stocks.

For Infosys, it was the first day on no-delivery period for its spilit. As a result, the stock touched a high of 7305, but closed at Rs 7101, losing a large portion of gains.

Similarly, Reliance also touched an all-time high of Rs 333.90 but at close, dipped to a low of 328. HLL, however, maintained its gain. It was up by over two per cent. The Sensex closed at 5458.06 after touching a low of 5439.48 points, showing a 35.01-point gain.

The number of advances was at 1031, whereas the number of declines was 1127. At the same time, around 205 stocks remained unchanged. The trading volume for the day was Rs 3793 crore. Telco hit the lower circuit. Among the index-based counters, HPCL was the only counter which showed a gain of over three per cent.ICICI, too, showed a rally during the last half-an-hour of the day.

Among the software stocks, Satyam remained firm for a major part of the day and failed to show a major gain over its previous close. Stocks like DSQ Software, Global Tele, Silverline, Wipro and SSI too showed impressive gains. However, Digital triggered selling in other software counters. It was down by more than five per cent. Tata Elxsi, HCL and Rolta too reported huge selling.

In the specified list, stocks like Zee Telefilms, Indogulf, BSES, Crompton Greaves, India Cements, Bilt and Essar Steel showed impressive gains. In the non-specified list, stocks like Pentafour Communication, Federal Bank, Vision Techno, BSEL, Times Bank, Kotak Mahindra, Adam Comsoft, and Lee&Nee Software remained the star performers.