World markets moved southwards reacting to a statement by Alan Greenspan, chairman Federal Reserve indicating cut in US interest rates with sharp setback to Dow Jones and UK stocks which further pulled down the south east Asian markets.

The market opened moderately higher at 3,230.98 points and touched a day's high of 3,266.71 points during the day. However, selling pressure from domestic institutions brought it down to a level of 3,215.77 to finally close at 3,223.57 points registering a diminutive drop of 1.83 points from its previous close of 3,223.57 points. The S&P CNX Nifty also changed marginally by 0.15 points to close at 934.95.

According to provisional figures collated by NSE, FIIs were net buyers at Rs 7.75 crore withdomestic institutions turning net sellers at Rs 4.11 crore. According provisional figures collated by BSE, FIIs were net buyers at Rs 19 crore with domestic institutions turning net sellers at Rs 26 crore.

``The market will continue to be in a stable mood until September 29, when Greenspan will change the US interest rates. The markets in India will react accordingly,'' said Dilip Bhat, a BSE broker.

``The market was slightly in an overbought zone and operators preferred to square up holdings in view of the last day of the current settlement to avoid payment of high margins on carry forward transactions,'' said a BSE broker.

With operator's squaring up and selling long positions, the market met with a moderate resistance even as scrip prices opened on a promising note. FIIs support came in spite of weak international markets where Dow Jones industrial average dipped by 1.87 per cent followed by other prominent south east Asian markets like Hong Kong, Japan and Singapore, which were sharply down atmidday.

Morgan Grenfell is rumoured to have bought Pentafour Software and Credit Suisse First Boston is reported to have bought Smithkline Pharma and Glaxo. Schroder's fund is reported to have bought Bajaj Auto and SBI with Canbank Offshore Fund buying L&T and NIIT.

Another FII is reported to have sold 2.5 lakh shares of Tube Investment and HG Asia is rumoured to have sold SKF Bearing. UTI is reported to have sold in PSU pivotals.

The fag end of the day saw a selling spree from local investors including Unit Trust of India. This coupled with liquidation by bull operators on the last day of settlement, eased the market considerably from its highest level to close at around yesterday's close, a drop of approximately one point. Besides, weak overseas markets also effected the overall sentiment.