Mumbai: The Sensex extended its gains to second session following a smart stocks rally in an otherwise lacklustre activity at the Bombay Stock Exchange (BSE) today on fresh buying in derivatives on the first day of new contract.

The BSE Benchmark 30-share Index opened on a promising note at 4717.83 and later fluctuated irregularly in a range of 4775.66 and 4680.42 before ending at 4756.39 from yesterday's close of 4708.55, a net rise of 47.84 points or 1.02 per cent.

Operators reportedly made fairly good purchases after mid-session in a bid to cover short positions at the weekend and even made fresh commitments for July contract of the Futures and Options segment.

Foreign Institutional Investors (FII), which reported net sales of Rs 242 crore on June 22 and 23, were believed to be sidelined and only made selective and small purchases.

Retailers and operators, however, seemed to be cautious in making any large commitments in view of consistent sales by domestic mutual funds which have reported net sales of Rs 1580 crore so far in the current month in equity and debt markets, brokers said.

Meanwhile, Prime Minister Manmohan Singh's yesterday's statement that the government would announce an energy policy package and pursue economic reforms to give a "new deal" to rural India did not have any impact on the market.

Blue chip stocks like Tata Motors, Tisco, RIL, ITC, Satyam Computers, MUL, MTNL, Infosys Tech, HPCL, Hindalco, Hero Honda HDFC, Grasim, GACL, Dr Reddy's Lab and Bharti Tele-Venture registered handsome gains.

However, HLL, BHEL, HDFC Bank, ICICI Bank and SBI showed marked falls due to profit booking.