Mumbai, July 11: The 30-scrip Sensitive Index of the Bombay Stock Exchange saw a technical correction on Friday following selling pressure by speculators in their bid to square up long positions. Friday was the last day of the trading settlement.

The index closed the day at 4,321.98 points to record a loss of 56.39 points over Thursday's close of 4,378.37. The exchange recorded a turnover of Rs 933.01 crore.

Meanwhile, National Stock Exchange's 50-scrip index recorded a loss of 18.05 points to close the day at 1,221.10 against the previous day's close of 1,239.15. The exchange recorded a turnover of Rs 1,621.27 crore.

"The market was essentially in an overbought state," a BSE member said. "A correction was overdue; hence, it is all right for the index to fall by 150 to 200 points to rise again with strength."

The Sensex dipped below 4,300 points as local operators and FIIs unloaded their holdings in scrips like Tisco, Reliance, ITC and State Bank of India. Market sources said line operators in Calcutta pressed for huge sales in Tisco and ITC.

A group of market analysts said that the concentrated action in leading MNC and FERA stocks had fuelled the rally.

FIIs have bought heavily in counters like HDFC, Larsen & Toubro, BHEL and Infosys, which helped pep up market sentiment.

Counters like Punjab Tractors, NIIT and Digital Equipment, too, have been cornered over the past few days by FIIs and institutional players.

However, local institutional dealers believe that leading domestic institutions, banks and mutual funds have entered into the market to book profits. This is especially true of B1 group stocks, which have shown an appreciation of over 20-30 per cent over the past two settlements.

ACC recorded a loss of Rs 4.50 to close at Rs 1,526.50, while Bajaj Auto dipped Rs 60 to close at Rs 893.25.

Larsen & Toubro registered a gain of Rs 5.50 to close at Rs 268, while HDFC was the largest gainer at Rs 4,747.25, Infosys touched a high of Rs 2,440 and Tata Tea Rs 427.50.