Sensex opened lower at 4565.17, dropped to the day's low of 4513.55 but recovered sharply and even rose further to the high of 4628.31 before closing at 4618.39 with a net gain of 47.30 points compared to the previous level of 4571.09. The BSE-100 index also recovered up by 17.19 points to 2107.01 from previous close of 2089.82.

Apart from short covering, the sentiment turned for the better following late buying by speculators and fresh purchases from foreign institutional investors (FIIs). Bulls were not willing to carry forward their positions following additional margins on the positions carried forward to the next settlement beginning Monday.

FIIs were reportedly net buyers in select cement and software shares in which they picked up sizeable quantity of shares of Infosys, NIIT, SSI Ltd, Tata Elexsi and Digital Equipment and others.Ranbaxy Lab remained the most active scrip with a turnover of Rs 225.86 crore of the total volume of business of Rs 2281.24 crore substantially higher than Rs 1610.28 crore registered yesterday.

Ranbaxy Lab edged up by a rupee to Rs 1009 on short covering. Satyam Computer rose by Rs 20.50 to Rs 932, Reliance by Rs 2.95 to Rs 188.40, Pentafour Software by Rs 24.20 to Rs 609.20, Infosys by Rs 470.90 to Rs 6550.85, Larsen by Rs 18.50 to Rs 378.50, Mahindra by Rs 11.50 to Rs 368.50, SBI by Rs 3.80 to Rs 213.30 and TELCO by Rs 3.65 to Rs 289.