Indian stock markets managed to close on a positive note Monday despite some wild fluctuations which at one point saw a key index drop by over 150 points from the day's high of 8,569.91 points.

Profit booking by investors after an 11-percent increase in the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) over the past two weeks resulted in the volatile trade, despite optimism in the overall investor sentiment.

The key 30-share index finally closed the day at 8,494.29 points to register a marginal gain of 23.25 points, or 0.27 percent, over the previous day's close of 8,471.04 points, data released by the bourse showed.

Some 20-odd minutes after trading started, following a two-day weekend break, the Sensex surged from the opening level of 8,503.70 points to the day's high of 8,569.91 points.

But the index started dipping from then on - with some minor corrective upswings in the interim - to the day's lowest level of 8,416.89 points despite some minor resistance at the crucial 8,500-point mark.

During the final hour of trading, the index staged a minor recovery to the level of 8.494.29 points at close - which was slightly above the previous day's close, but well below the day's opening level.

"The mood of the market continued to be positive. But investors were in no mood to let go of any opportunity that offered a chance to book profits," an analyst with a brokerage here said.

"While foreign funds have been net buyers this month after being net sellers in October, the trend is just the opposite for domestic institutions that have been booking profits this month. This also fuelled the losses," the analyst added.

Among the 30-shares that comprise the Sensex, 14 made advances, one remained at the same level, while 15 declined. Banking stocks were in the limelight, with the industry's index surging 2.46 percent to outperform the market.

The gainers among the Sensex stocks were led by HDFC Bank, up 6.56 percent at Rs.676.90, followed by Ranbaxy Laboratories, up 2.94 percent at Rs.393.80, and Housing Development Finance Corp, up 2.72 percent at Rs.1,078.60.

ICICI Bank, up 2.29 percent at Rs.527, Tata Consultancy Services, up 1.68 percent at Rs.1,509.45, State Bank of India, up 1.22 percent at Rs.881.85 and Oil and NaturalGas Corp, up 1.13 percent at Rs.991.10 also recorded gains.

Bharat Heavy Electricals limited led the losers, down 2.98 percent at Rs.1,256, followed by Hero Honda, down 2.82 percent at Rs.786.35, Tata Steel, down 1.60 percent at Rs.365.35 and Larsen and Toubro, down 1.56 percent at Rs.1,551.45.

ITC Ltd, down 1.42 percewnt at Rs.128.25, Gujarat Ambuja Cement, down 1.27 percent at Rs.73.85, Infosys Technologies, down 1.12 percent at Rs.2,685.55 and Hindustan Lever, down 1.07 percent at Rs.170.40, also logged losses.