"Tuesday being the last day of the settlement at NSE and the fact that the next two days are holidays at BSE did not see the customary shifting of positions from one exchange to another. The spate of holidays ahead has led to players not taking fresh positions. With no good tidings coming from the government there is a gloomy picture all around and this triggered off the heavy bouts of selling," a BSE broker said.

"Overall the economy is in a very bad shape with business down by almost 30 per cent across the board. Yet, Tuesday's slide came as a surprise, inspite the Federal Bank cutting rates and the Asian markets buoyant. The country's bourses have gone in a diametrically opposite direction," Shailesh Merchant Brokers vice-president Dilip Bhatsaid.

According to marketmen, FIIs offloaded substantial quantity in scrips like Reliance, Telco, Tisco, Satyam Computers and ACC. Credit Lyonnaise is rumoured to have sold huge chunks of HDFC Bank shares on behalf of Morgan Stanley. The Canbank offshore fund is reported to have bought 1.5 lakh shares of Telco. UTI is reported to have bought MTNL, Smithkline Pharma and Satyam Computers shares. SBI and Credit Lyonnaise bought Zee Telefilms shares, while the Canbank Offshore fund is reported to have sold HCL-Infosys shares.

"Telco touched a low of Rs 98 on BSE. The downtrend in Telco is due to the market factoring the likely poor performance of the commercial vehicles major during the first quarter of the financial year 1998-99," Doshi said.

The Reliance scrip, which ruled at the Rs 107 on the Moorat trading, fell to Rs 99 below the crucial Rs 100 mark on Tuesday before closing at Rs 101.90 on BSE and Rs 101.30 on NSE.

"Reliance is basically in the global commodities business. Due to global recessionand glut in the commodity trade the company's fortunes are under doubt. Due to large volumes the profits won't take a beating. However, the market recognises these fundamental factors that may affect the company's fortunes in the future", a dealer at foreign brokerage house said.