Mumbai: In a dramatic turn, stocks bounced back and recouped their initial sharp losses as operators and retailers rushed to cover short positions in derivatives after the mid-session, following resolution of the crisis arising out of DMK (Dravida Munnetra Kazhagam) not taking charge of portfolios.

The Sensex, however, failed to maintain its day's higher levels due to selling pressure from Foreign Institutional Investors (FIIs) at the fag end and ended at 5102.22 against yesterday's close of 5123.23, netting a fall of 21.01 points or 0.41 per cent.

After opening moderately lower at 5117.52, the BSE Benchmark 30-share Index had fallen sharply by 147.22 points to the intra-day low at 4976.01 on heavy selling triggered by FIIs pull out during last week and the DMK's firm stand of not resuming office until the 'mistakes' in allocation of portfolios in the Union Cabinet were rectified.

Cautious at early stages of the session, operators later covered short positions in the futures and options segment ahead the expiry of May contract on Thursday.

The turnaround was largely attributed to news that the crisis arising out of portfolios allocations was resolved with the Prime Minister deciding to allocate Cabinet berths to DMK as promised.