Mumbai: After an initial rally, equities reacted sharply and closed with marked falls pushing the SENSEX down by nearly 37 points on the Bombay Stock Exchange (BSE) on December 9 even as the government announced strategic sale of Hindustan Petroleum Corporation Limited (HPCL) and a public offer in the case of Bharat Petroleum Corporation Limited (BPCL).

Domestic funds led by Life Insurance Corporation (LIC), which have been consistent buyers in the past several days, reportedly booked profits at higher levels in the light of a slow down in foreign institutional investments (FII) further commitments.

The BSE Benchmark 30-share Index opened remarkably higher at 3,320.87 and surged up to the intra-day high at 3,349.36 on selective buying by foreign funds and bull operators at early stages.

However, the BSE barometer met with strong resistance and dropped sharply during latter part of the session due to increased selling pressure and ended at 3,269.31 as against the previous close of 3,306.29, netting a fall of 36.98 points or 1.12 per cent.

The broad-based BSE-100 Index also dipped by 27.35 points to 1,605.63 from the previous close of 1,632.98.

Brokers termed the negative reaction in stocks as necessary correction required for the sound health of the market.

PTI