Mumbai: Stocks reeled under heavy sell-off triggered by heightening tension on Indo- Pak borders, pushing the SENSEX to 21-week low at 3114, only to bounce back at the last day recovering major part of losses on the Bombay Stock Exchange (BSE).

The BSE barometer ended the week down by 2.34 per cent, despite its largest one-day rally by 141 points or 4.55 per cent in the last one year.

Stocks crashed on consistent onslaught by punters and retail investors, fuelled by the government's serious steps such as asking Indian Army to retaliate any action across the border, and to consult the "war book", which is usually done when the Army gets ready for war.

However, stocks made a dramatic turnaround aiding the SENSEX to recoup large portion of its losses on May 24 as war fears receded following Prime Minister Atal Behari Vajpayee's remarks before leaving for a short holiday to Manali, that war clouds were not on the horizon.

While early four sessions witnessed continued sell-off on war fears induced by the government's tough talk and actions indicating that India was getting ready for military strike to retaliate May 14 massacre of 30 people in Jammu by terrorists, Vajpayee's announcement of a Rs 6,165-crore special economic package for development of Kashmir and leaving for a holiday, was enough indication for punters to make out that the war is not on the India's agenda.

Similar development was seen in Pakistan with stocks on Karachi Stock Exchange bouncing back from their lowest levels.

PTI