After trading in a range bound manner till the mid session, the 30-share Sensex witnessed a free fall to breach the crucial barrier of 4,088 and closed at 4,041.89 registering a net loss of 24.93 points. The S&P CNX Nifty index witnessed a sharp decline of 15.75 points to close at 1,163.20 points.

The gross long positions on the BSE registered a decline of Rs 69 crore, however considering the simultaneous decline of Rs 78 crore in the gross short positions, the net long positions on the exchange witnessed a marginal rise.

While the net long positions on the BSE rose to Rs 1,209 crore, the short positions fell from a high of Rs 587 crore to Rs 509 crore.

Similarly the turnover on the NSE took a severe beating to close at Rs 1,969 crore, the turnover on the BSE continued to remain at Rs 1,566 crore. However the volumes on theB2 counter continued to dip further to a low of Rs 3.95 crore on Wednesday.

According to brokers, domestic institutions led by UTI provided supplies at the higher levels which led to a sharp decline in the index from 4,100 mark. ``Market is not able to maintain a tempo. Unless it finds support at 4,080-4,090 levels, a rally cannot be ensured,'' said Ambareesh Baliga of Kotak Securities. According to brokers the activity was concentrated at the counters of Reliance, Larsen, Sterlite, Digital Equipments, Satyam Computers and Infosys Technologies.

The buying spree at the Infosys Technologies counter provided the trigger point for the rally in infotech stocks on Wednesday. Considering the huge premium at which Infosys ADR is being traded, its underlying stock opened with a gap of over Rs 20 on the domestic markets. The stock traded in the band of Rs 3,132.25 and Rs 3,275 before closing at Rs 3,190 levels. The counter clocked a huge volume of over 1.57 lakh shares on the BSE. Other infotech counters like PSIData Systems, BFL Software and Rolta witnessed fresh enquiries during the mid session.

Another prominent feature of the day was Reliance. The stock opened with a gap of Rs 7 at the high of Rs 195, however closed weak at Rs 186.40 with a phenomenal volume of over 91 lakh shares.

Interestingly, the price discrepancy between the closing prices of NSE and BSE on Tuesday trickled down to the trading session on Wednesday. Digital Equipment was locked at the upper limit of the price band at Rs 485.55 on the BSE while on the NSE the stock hit the upper limit at Rs 508.75. At both the exchanges the counter witnessed huge volumes aggregating to over 18 lakh shares. The counter also registered huge unexecuted orders on both the bourses aggregating to over 2 lakh shares. According to brokers FII interest was restricted to blue chips like Hindustan Lever, SBI and Zee Telefilms.