The Sensex opened 16 points higher at 4,975. The markets sentiment was extremely cautious in the opening session as players were waiting for the FM's announcement on the proposed transaction tax in the afternoon session.

The Sensex failed to hold on to its gains and slipped into the red to touch a low of 4,952 in mid-noon trades. The markets, however, towards the fag-end of the trading session saw a sharp recovery, which saw the index zoom past the 5,000-mark to touch a high of 5,041 after the FM announced cuts in transaction tax from the proposed 0.15% to 0.1%.

The Sensex, however, at close slipped below the 5,000-mark on profit-taking in majority of the stocks, and ended with a gain of 36 points at 4,994. The Nifty added 15 points to close at 1,581.

Reliance gained 1.42% (Rs 6) to Rs 434. ITC and HLL ended marginally lower at Rs 992 and Rs 122, respectively.

ONGC clocked a per cent gain (Rs 7) to Rs 699. While SBI moved up 1.73% (Rs 7) to Rs 441, MTNL added 2.42% (Rs 3) to Rs 133. HPCL was up a per cent each at Rs 294 (up Rs 3).

HDFC shot up 3.40% (Rs 19) to Rs 567. While Reliance Energy added 1.26% (Rs 7) to Rs 576, Tata Power jumped 3.66% (Rs 9) to Rs 263. Tisco spurted 3.54% (Rs 12) to Rs 357.

Satyam rose 2.45% (Rs 8) to Rs 334. While Wipro was up a per cent (Rs 5) at Rs 524, Infosys, however, ended down a per cent (Rs 11) at Rs 1,437.

Maruti moved up 1.55% (Rs 6) to Rs 427. Bajaj and Hero Honda were up a per cent each at Rs 840 (up Rs 7) and Rs 441 (up Rs 5), respectively. Tata Motors was marginally up by Rs 2 at Rs 403.

Grasim lost 1.38% (Rs 13) to Rs 959. While Gujarat Ambuja slipped a per cent (Rs 2) to Rs 272, ACC was down a rupee at Rs 232.