Foreign funds were net buyers in stocks like ACC, Larsen, TELCO, Grasim, Hindalco, Mahindra and some others. Local operators including Indian financial institutions were engaged in profit-booking and pressed sales in MTNL and some power scrips.

Sensex opened marginally up at 4332.84 but later fluctuated in a restricted range between 4355.67 and 4309.57 before closing at 4326.41 with a minor gain of 4.90 points as against yesterday's close of 4321.51. The BSE-100 index, however, eased fractionally by 2.02 points to 1870.21 from previous close of 1872.23.

Brokers said operators turned cautious and booked profits in high priced stocks like ITC, Satyam Computer, Pentafour Software and some other shares following reports that the militant groups hadrefused to withdraw from the Drass-Kargil sectors on the Indian side of LoC and vowed to ignore appeal from the Nawaz Sharif government for a pullout.

Of the 146 traded specified scrips, 71 posted moderate to handsome gains while 69 lost moderate ground and six remained unchanged. Larsen & Toubro clocked the highest turnover of Rs 186.27 crore of the total volume of business of Rs 1557.44 crore. Larsen spurted by Rs 22 to Rs 345 on fresh buying. SBI rose by Rs 3.05 to Rs 263.45, TELCO by Rs 17.70 to Rs 239.50 and TISCO by a rupee to Rs 154. However, Reliance lost by Rs 4.15 to Rs 180.60, Satyam Computer by Rs 56.95 to Rs 1217, ITC by Rs19.50 to Rs 1057.50 and Hindustan Lever by Rs 1.40 to Rs 2425 on profit-taking.