According to market observers, the initial euphoria on the buy-back of shares vanished completely with participants raising queries on the guidelines which would be framed by the regulator.

The BSE Sensitive index started better at 2913.62 points but dropped soon to close near the intra-day low of 2833.04 points as compared to the yesterday's close of 2895.84 points. The BSE-100 index dipped by 26.14 points to 1270.62 from previous close of 1296.76. Earlier, bears who had covered their short positions on the opening day of the new account on the National Stock Exchange (NSE) pressed heavy sales after knowing that FIIs turned net sellers since yesterday.

FIIs were reported to have sold shares of ITC, SBI, Reliance, Telco, MTNL, HLL and others. Thedomestic institutions led by UTI and some mutual funds were reported to have followed FIIs by selling stocks of HLL, ITC, MTNL, Novartis, Glaxo etc. The volume of business dipped sharply to Rs 1217.74 compared to yesterday's turnover of Rs 1,514.79 crore.

On the NSE, share prices opened firm but declined sharply towards the fag-end due to heavy offerings by FIIs as well as domestic funds and closed with widespread losses. The S&P CNX Nifty index fell by 7.75 to close at 833.85 from the last close of 841.60. CNX Nifty junior declined by 13.60 to 1442.35 .