Mumbai: The Sensex extended its gains to third straight session ending 42 points higher on the back of selective stocks rally on the Bombay Stock Exchange today (Mar 29, 2004) on fresh purchases by Foreign Institutional Investors (FIIs) and domestic financial institutions.

However, key IT stocks suffered a sharp setback due to selling pressure induced by weak Dollar, as well as reports that the outsourcing business of Indian companies is likely to be affected ahead of US elections in November 2004.

The BSE benchmark 30-share index opened moderately higher at 5,538.52 and later moved irregularly between 5,578.74 and 5,495.31 before ending at 5,571.37 from last Friday's (Mar 26, 2004) close of 5,528.94, a net rise of 42.43 points or 0.77 per cent.

Banking and select public sector undertakings (PSU) stocks hogged the limelight having scored impressive gains on sustained buying support.

FIIs, which were net buyers for the past couple of weeks, seemed to have been engaged in selective purchases at the prevailing lower price levels, while local institutions picked shares of some heavyweighted counters at the end of current financial year, brokers said.

The broad-based BSE-100 index firmed up by 25.41 points to 2,944.21 from previous close of 2,918.80.

Oil and Natural Gas Corporation (ONGC) overcame early pressure and recovered major part of losses on late buying support from institutional investors.

SBI, ICICI Bank, RIL, BHEL, Bajaj Auto, HDFC, HDFC Bank, Hero Honda, HLL, Hindalco, MTNL, Ranbaxy Lab, Tata Motors, Zee Tele and Tisco recorded marked gains.

However, Infosys Tech, Satyam Computers and L&T showed substantial falls on selling pressure.