Prices started off on a strong footing on reports of LIC investment plans in equities and the Russian government's decision to resume imports from India, bolstered by fresh purchases from FIIs and LIC.

LIC, which has been a net buyer all through last two months, was said to have planned to invest Rs 2,000 crore into equities in 1998-99 with a major part of Rs 1200-1300 in the secondary markets and Rs 700-800 crore into PSU divestment.

The BSE Sensitive Index opened steady at 2851.45 and gradually moved upwards to close near the day's high at 2921.80 as against last Friday's close of 2849.82 points. The BSE-100 index spurted by 32.22 points to 1298.71 from the previous close of 1266.49.

Dealers said the low badla of about one per cent at the turn of the settlement and backwardationcharges in Britania and Tata power indicated the short position of the market inducing operators to cover their holdings.

FIIs were net buyers in pharma scrips like Novartis, Glaxo, German Remedies, Pfizer, Smithkline Pharma, Dr Reddy's Lab besides software shares like Satyam Computer, NIIT and Pentafour Software. Domestic institutions, led by LIC picked up shares of Telco, SBI and Titan watch in good quantity.

As a result, Sesa Goa, Raymond Ltd, Dr Reddy's Lab and Smithkline Ph hit the upper circuit breaker.

The BSE-200 and the Dollex were quoted substantially up at 301.23 and 117.81 compared with last weekend closing of 294.10 and 115.10 respectively.

ITC was the most active scrip with a turnover of Rs 160.64 crore of the total volume of business of Rs 1069.32 crore. On the NSE, the Nifty rallied by 16.80 points due to good buying by domestic funds and operators. The S&P CNX Nifty shot up by 16.80 to close at 845.15 as against the previous close of 828.35.

The market witnessed improved turnover ofRs 1,260.13 crore from higher number of 532.50 lakh shares and in 1,84,649 trades. Debentures turnover was also higher at Rs 39.41 lakh.