Mumbai: Stocks overcame early resistance and rallied sharply for the third consecutive session today (Oct 1, 2004), aiding the Sensex to end above the five-month high at 5675.54 on heavy buying support prompted by a robust GDP growth and a marginal fall in inflation rate.

The BSE barometer had closed at 5669.58 on May 7, 2004 and at 5757.30 on May 6, 2004.

Attributing the initial resistance and low volume to the turnover tax that came into effect from this trading session, market players said sustained and heavy purchases by Foreign Institutional Investors (FIIs) induced domestic operators to make large commitments in blue chip counters.

The BSE Benchmark 30-share Index that dipped to the day's low of 5573.56 after a strong start, later rallied sharply to the intra-day high of 5685.68 before ending the day at 5675.54 as against yesterday's close of 5583.61, a net rise of 91.93 points or 1.65 per cent.

Retailers reportedly were heavy sellers in debt market while making large commitments on bourses.

FIIs, which reported net inflow of Rs 276.10 crore in the first three days of the week, reportedly made heavy purchases in blue chip counters including RIL, Tata Motors, ONGC, HDFC, L&T and Dr Reddy's Lab.

The sentiment was bolstered by a robust 7.4 per cent growth in GDP in first quarter of the fiscal and downtrend in the inflation which dipped by 0.07 per cent to 7.80 per cent for the week ended September 18.

The fresh buying spree has helped the market to absorb the new initiative of turnover tax.