India's key share market index staged a smart recovery Wednesday, a day after slipping over one percent, following large-scale foreign fund inflows on hopes of impressive corporate earnings performance.

Dealers said that the stock market opened for the day on a positive note after witnessing massive institutional selling pressure in the previous session.

The market rally gained momentum in the early trade as bullish foreign institutional investors pumped more money into the trading ring to pick up heavyweight new as well as old economy stocks.

The stock market barometer 30-share Bombay Stock Exchange sensitive index or Sensex closed at 7,119.88, representing a gain of 70.88 points or 1.01 percent over its previous session's close.

The market benchmark is slightly lower from its all time closing high of 7,151.08 touched Monday on large-scale across the board buying.

"With the first quarter of the current fiscal year coming to a close, investors are now beginning to focus on the corporate earnings performance of blue-chip companies," said an analyst with a domestic brokerage firm.

"Most of the fund investors are hoping that frontline corporate houses will post better than expected earnings growth in the current quarter on increased sales," added the analyst.

A string of Indian companies like Infosys Technologies, Wipro and Tata Motors will start unveiling April-June quarterly financial numbers from the first week of next month.

The stock market has witnessed a strong bull-run on the bourses in the past one week on resolution of a seven-month ownership feud in Reliance business and progress of monsoon in the country.

The June-September monsoon rains are very crucial for the Indian agricultural sector, which accounts for one-fourth of the country's total economic output and provides employment to nearly 70 percent of the country's population.

India's economy grew by 6.9 percent in the fiscal year ended March 31, 2005 on top of a higher increase of 8.5 percent in the previous year due to increased agriculture production.

In the old economy sector, shares of Reliance Industries gained 2.3 percent to touch Rs.643.90 after the company's board Tuesday said the process to formalise the splitting of the Reliance conglomerate would be finalised soon.

Shares of automobile companies such as Tata Motors rose 2.7 percent to Rs.428 and two and three wheelers major Bajaj Auto closed with a gain of 2.6 percent at Rs.1,366.90.

In the technology sector, shares of Bangalore-based software major Wipro ended 1.5 percent higher at Rs.752 and Infosys Technologies, the country's second largest software exporter, advanced 1.3 percent to Rs.2,322.