However, the side market was heavily damaged as the market sentiment was yet to recover from the after shocks of the arrest of stock broker Ketan Parekh. The stocks associated with the name of this broker continued their downslide.

The Sensex opened very weak as it traded for the first time after Ketan Parekh was arrested on Friday evening. It was the first day of the new settlement on Monday at the BSE and the Sensex opened with a negative gap at 3491.41, against Friday's close of 3604.38 and reached an intra-day low of 3436.33 immediately after the opening session. But it recovered at the fag end of trading to reach an intra-day high of 3578.95 before closing at 3566.26, a loss of 38.12 points.

Nifty also followed suit by losing only 10.10 points to close at 1138.10, against its previous close of 1148.20.

Dealers said the market sentiments have been hit hard by the arrest of the Ketan Parekh. It has lost confidence as threat of more brokers to be arrested by the investigating agency is looming large. However, FIIs as many in the recent past, came to the rescue of the market and a moderate recovery was seen, they said.

Stocks like Zee Telefilms, Satyam Computers, Castrol, HLL were the movers as they bounced back from the low levels to end the day in positive territory. Zee sprung back to Rs 130 before settling at Rs 126.40, gaining 3.98 per cent over its previous close and 13 per cent over its intra-day low of Rs 105.70. Among the new economy stocks, Infosys Technologies also recovered from an intra-day low of Rs 3,735 to a high of Rs 4,151 gaining 10 per cent over its low. Satyam Computers bounced back 13 per cent intra-day low and gained 3.98 per cent, against previous close to end the day at Rs 247.75.

Lubricant major Castrol (up 1.76 per cent to Rs 233.90) was firm through out the session on the view that investors can still make a gain of 34 per cent by accepting BP Amoco's open offer for further 20 per cent stake at Rs 311 per share.

Ketan Parekh's favourite stocks, including some media stocks, continued their southward movement. HFCL and Global Tele were frozen at 16 per cent lower circuit at Rs 133.25 and Rs 135.70 respectively.

Global Trust Bank and UTI Bank were also down at Rs 28.80 and Rs 23.90 respectively, while another bank stock, and the culprit of the pay order scandal, Bank of India lost 8 per cent to close at Rs 10.40.