The market started on a firm note with the benchmark index opening about 26 points higher and moved up further to touch the intra-day high of 4082.44 points before closing at 4071.98 points gaining 35.49 points. At NSE, S&P CNX Nifty was also up by 9.05 points to close at 1284.65 points as compared to Monday's close of 1275.60 points.

Dealers said that the market witnessed all round buying in low-priced old economy stocks with active short covering from the very beginning of the trading session as Tuesday was the last day of current settlement at NSE.

The process of short-covering of positions was restricted mainly to some leading IT and media stocks. The highlight of Tuesday's session, according to brokers, was the market gaining inspite of index heavy weight stock Infosys Technologies taking a southward journey.

Hindalco was the star performer of the day. The scrip gained more than 7 per cent to close at Rs 732.50, HPCL continued it's upsurge, rising 4.31 per cent to close at Rs 133.10. Media stock Zee Tele was up by 4 per cent mainly on back of short-covering by operators to close at Rs 298.95, L&T continued attracting huge volumes with it's price increasing by another 2.74 per cent to close at Rs 195.05, ICICI gained 2.48 per cent to close at Rs 95.15 and ITC closed 2.32 per cent higher at Rs 867.40.

Some major stocks from the old economy sector which attracted profit taking and figured in prominent losers list included lubricant major Castrol, which lost 2.59 per cent to close at Rs 233.40, PSUs Bhel and MTNL lost nearly 1.50 per cent each to close at Rs 140.70 and Rs 166.40 respectively. Gujarat Ambuja Cements was down by 1.29 per cent to close at Rs 152.75.