The index plummetted to the day's low of 3618.60 in the afternoon after holding steady at yesterday's closing levels as speculators pressed sale on all counters. The market, however, climbed back later to close at 3682.69 points, still 74.81 points lower than the previous close.

The Sensex had opened marginally up at 3768.91 and stayed steady till midsession. However, it dropped sharply and touched the day's low at 3.10 pm before climbing back. The BSE-100 index also dipped by 33.57 points to 1619.85 from previous close of 1653.42.

``The exchange opened this morning on an optimistic note with operators continuing their buying spell. However, with rumours coming in that Sebi has asked the BSE president to resign, the fall in the south-east Asianmarkets coupled with the fall in Nasdaq yesterday led to the dramatic fall in the market,'' said Dilip Bhat, a BSE broker.

Software counters led the headlong fall as rumours spread that one of the main broking firms active in many second rung software counters is barred from trading due to its association with the BSE president. The fall was severe in the case of second rung software scrips as the top line software scrips were already hammered in the previous sessions. Infosys closed 4.12 per cet lower at Rs 2790, NIIT down 5.46 per cent at Rs 1998, Satyam down 4.5 per cent at Rs 1479 and Pentafour software down by 3 per cent at Rs 1108.

The fall was also broad-based, covering the entire market, with 27 of the 30 Sensex scrips closing lower. Among the survivors today were index heavy weights -- HLL, Mahindra & Mahindra and Telco. At the NSE more than 800 out of the total of 1600 scrips traded scrips came up for auction. The high volatility was accentuated by the fact that there was only just one tradingsession left in this settlement as BSE is closed on Thursday because of `Ram Navmi'. Most operators either wound up or covered their intra-settlement positions due to this factor, and led to the last minute recovery. A section of the market expect the downward trend to continue for some more time.