After opening with a loss of 94.17 points, at 8,103.75, the BSE Sensex bounced back in the positive zone with sharp buying seen across Banking and Capital Goods stocks.

The top gainers in the sectoral indices included BSE Bankex (2.27%), Capital Goods (1.18%) and IT (0.91%). On the other hand, FMCG (-2.02%), Health Care (-1.58%) and Auto (-0.89%) were top losers in the 30-share index.

Investors continued to offload midcaps and smallcaps from their portfolio. BSE Midcap and Smallcap were lower by 0.89% and 1.12% respectively.

A sustained selling by foreign funds amid the global financial sector crisis, a terrible state of the worldwide economy, slowdown in the domestic financial system, weak Indian currency and insecurity about the profit outlook of India Inc continued to weigh down investor reaction.

Foreign institutional investors (FIIs) have pressed heavy sales this year. In February 2009, FII outflow totaled Rs 2707 crore. FII outflow in calendar year 2009 totaled Rs 8519.30 crore (till 4 March 2009). Domestic institutional investors (DIIs) have been absorbing selling by foreign funds.

At 12:00 p.m., the 30-share index Sensex gained 29.68 points at 8,227.60. It also hit a high of 8,264.58 and a low of 8,047.17. Meanwhile the broad based Nifty was trading higher by 11.30 points at 2,588.00, after touching a high of 2,591.80 and a low of 2,539.45.

With 753 advancements and 1,238 declinations, the overall breadth of the market was negative.

The major performers in the 30-share index were ICICI Bank (3.45%), HDFC Bank (3.14%), Larsen & Toubro (3.07%), HDFC Bank (2.72%), Reliance Communications (2.36%), and Jaiprakash Associates (1.95%).

On the other hand, the major losers in the Sensex were Ranbaxy Laboratories (3.50%), ITC (2.78%), Maruti Suzuki India (2.04%), Hindustan Unilever (1.72%) and Tata Motors (1.40%).

Asian stocks dipped on Friday headed by financial stocks following overnight steep slide in US stocks.

Key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore lost between 0.31% to 3.38%. Taiwan's Weighted index surged 0.35%.

US stock indexes Thursday fell to their lowest levels in more than 12 years, with noteworthy declines in and General Motors.