The S&P CNX Nifty Index declined by 25.4 points to close at 906 points.

Reflecting the negative mood of the market, the Skindia GDR Index nosedived by 6 per cent to trade at 621.42 points during mid-session. Most of the GDRs were quoting at a discount of 4-7 per cent to their previous closing prices. Volumes sagged on the Bombay Stock Exchange with the turnover falling to a low of Rs 754.59 crore. The advances versus declines ratio once again favoured the declines, indicating a bearish phase. On the BSE, the ratio was pegged at 323:644.

"The index has tested the lower levels of 3,189 and 3,140 points. Now it should move down to 2,992 points before we witness any further correctionsin the market," said BSE broker Neel Dalal.

According to brokers, there were rumours that UTI was planning to stay away from the market till the Sensex bottomed out at 2,991 levels. "The collections of over Rs 3,000 crore in the US-64 scheme by UTI is bound to bring in good news for the market, considering that the FI is likely to pump in at least 50 per cent of these funds in the secondary market," explained a veteran BSE broker.

Steel major Tisco plunged below the Rs 100 mark to close at Rs 99.25 on the NSE. According to market players, this has been the lowest bid witnessed by the stock during the past 8 years, reflecting the negative perception of the earnings growth of the company during fiscal 1998-99.

Interestingly, the market was agog with rumours that a leading investment broker who had earlier decided to keep out of the ‘non-vegetarian stocks has kicked off hectic activities at the ITC counter which saw the stock fall by over 4 per cent on both the bourses.

ITC recorded the highest turnoverof Rs 212 crore on the BSE. On the back of its quarterly performance, ITC's shares were hammered to a low of Rs 598, a net loss of over 6 per cent on the local bourses. A similar trend was recorded on the GDR markets with the ITC GDR falling by 7 per cent to trade at a low of $16.88

"The index should continue to be rangebound in the band of 3,000 to 3,400 points," said S Subramanium of Warburg Dillon Read.

According to market sources, FIIs sold ITC, Colgate and Nestle. On the BSE, FIIs continued to be net buyers to the tune of Rs 3 crore. Most of the institutional sales were concentrated on the NSE, brokers said.

Local institutions like LIC and select nationalised banks were rumoured to have picked up small chunks of Tata Tea, Ranbaxy Labs, HPCL and BPCL. On the BSE they bought stocks worth Rs 7 crore.

Nocil recorded a smart recovery of 7.85 per cent on both the local bourses to close at Rs 35.05.

While many of the index-based stocks hit their new lows on the BSE -- Arvind Mills, GE Shipping,Grasim, HPCL, IPCL and Mahindra & Mahindra, select stocks like Britannia Industries and Industrial Oxygen moved against the market tide to register new highs.