"The market is completely news driven. We could see such intra-day fluctuations since market is now meant for speculators and not for genuine investors. Investors need to now wait and watch for appropriate entry opportunities," said Ambareesh Baliga of Kotak Securities.

According to brokers, rumours of heavy shelling by Indian troops on Kargil and counter attack of Pakistan on Kashmir, unnerved the operators who rushed to liquidate their shorts which saw the index fall from the intra-day high of 3,991.80 to a low of 3,885 points. Brokers explained that this provided an opportunity for the bear operators to cover their long open positions.

The net long positionson the BSE registered a marginal rise of Rs 4 crore from Rs 1,075 crore to Rs 1,079 crore. The gross long positions on the BSE stood at Rs 1,576 crore while the gross short rose to Rs 497 crore.

The rise in the net long positions was atttributed to the shifting of open positions to the BSE since today was the last day of the trading account on the NSE.

The S&P CNX Nifty index also staged a marginal decline of 8.5 points to close at 1,123.80 points. Interestingly, the advances at the exchange was pegged at a low of 332 while the declines stood at a high of 626.

Select counters however moved against the market tide reflecting the institutional participation at these counters. Stocks like ICICI, Corporation Bank, Himachal Futuristic, DSQ Software, Cybertech, DSQ Software, VST Industries and Vikas WSP registered gained over 5 per cent on an average.

Mirroring the speculative interest in the market, Bausch & Lomb, Tata Honeywell, CMC, Lakme and Navnit Publications were locked at the upper limit of theprice band on the NSE. According to market sources, upcountry operators were rumoured to have build huge positions at these counters which has led to a consistent rise in the volume of non-specified group at the BSE.

While analysts and brokers at large hold an unanimous view that the direction of the market now depends on the developments that take place at the border, technical analysts predict a 100 point rally on Wednesday."The 3,885 mark is now crucial for the market. If it breaches this level the index is bound to touch 4,200 in the next few sessions," said BSE broker, Neel Dalal.

Among the pivotals, ACC, Bajaj Auto, Colgate, and MTNL lost over 3 per cent on an average. However Hindustan Lever continued to remain firm on both the local bourses. The stock gained 2.4 per cent on the NSE to close at Rs 2,350. According to brokers the stock is holding firm on account of the backwardation of Rs 9 registered by the counter at the badla session on the BSE. Pharma stocks once again lost ground with operatorsliquidating a huge chunk of their holdings. While Glaxo nosedived by Rs 15.95 to close at Rs 753, German Remedies lost Rs 31 to close at Rs 834. Dr Reddy's Lab also lost Rs 28 to close at Rs 812.

Speculator driven stocks like Zee Telefilms and Sterlite closed at a premium of over 3 per cent on the NSE reflective of the backwardation attracted by these stocks at the BSE. Among the institutional deals, BSES, Cipla and Container Corporation witnessed huge cross deals on the BSE.