Mumbai: After a weak start, equities rallied smartly and the SENSEX extended its gains to straight third session in an otherwise volatile activity at the Bombay Stock Exchange (BSE), on August 11 even as investors discounted SEBI's (Securities and Exchange Board of India) action against a leading foreign fund manager.

Reacting negatively to the SEBI order barring former Asia-Pacific head of Alliance Capital Samir Arora from the stock market on charges of insider trading, the BSE Benchmark 30-share Index opened sharply lower at 3842.14.

However, market sources said it opened sharply down as a result of an erroneous entry of ITC opening rate at Rs 674.75 as against last weekend's close of Rs 762.10.

The SENSEX later rallied smartly to the intra-day high at 3915.90 before ending at 3893.41 as against last Friday's close of 3883.76, a net gain of 9.65 points.

The broad-based BSE-100 Index firmed up further by 28.16 points to 2028.98 from previous close of 2000.82.

Though key PSU (Public Sector Undertaking) stocks ran out of steam after a smart rally in response to reports that the government would divest part of its residual stakes in disinvested PSUs by January 2004, others like SAIL, Neyveli, GNFC, SCI, IBP, IOC and ONGC remained in the forefront scoring impressive gains.

Ruling out any impact of the SEBI's action against Arora, brokers said selling by local funds and drastic fall in FII activity seemed to have discouraged operators.

Speculators were believed to be heavy buyers in steel, shipping and power stocks.

PTI