The market was unnerved further on Monday by Iraqi president Saddam Hussein's speech on Iraqi television lauding Iraqi soldiers for resisting the US invasion.

The speech worsened fears that the war in Iraq will be prolonged and protracted. As a result, the 30-share BSE Sensex plunged 59 points to 3,159.53 trading close to the day's low.

Bourses across Europe were in the red today dogged by worries that the war will last longer than anticipated. The US futures market indicate a weak opening of US markets. The Dow Futures plunged 150 points to 8,330. The Nasdaq 100 Futures were down 16 points to 1,078.

European markets moved sharply lower in early trades. London's FTSE 100 index was down 61 points to 3,799, Germany' Dax index was down 75 points to 2,639 and the CAC-40 index in France dropped 54 points to 2,836.

Top losers in afternoon trades were Hindustan Lever (down 4% to Rs 156), HCL Technologies (down 3.7% to Rs 159.30), Satyam Computer (down 3.6% to Rs 203.30), Reliance Industries (down 3.5% to Rs 284.10), Tisco (down 3.3% to Rs 139) and Zee Telefilms (down 3% to Rs 72). 27 out of 30 Sensex stocks were in the red.

The market's weakness in afternoon trades manifested after Saddam Hussein, addressing Iraqi people on a state television on Monday, hailed the Iraqi military in resisting US and British troops . He said the invasion forces were "trapped" by heroic Iraqi resistance. There has been speculation going on over the fate of the Iraqi president ever since US had begun bombing Baghdad since Thursday last week.

The fall in the market has also been accelerated due to margin calls being triggered off. Thus, those who buy shares on margins were forced to unwind positions with financiers pulling out funds from the market due to year-end considerations, dealers say.

Dealers say the unexpected and stiff Iraqi resistance to US and allied troops near Baghdad has caused nervousness in the market. Iraqi forces inflicted casualties and took their first US prisoners on Sunday. Concerns have emerged that US-led forces might get bogged down at the gates of Baghdad.

Today's reversal chases a four-session gain for market indices starting Wednesday on optimism

that hostilities in the Persian Gulf would be brief. The markets bounced back albeit amid volatility on Thursday, Friday and during the two-hour trading session on Saturday. The Sensex surged 133.82 points or 4.33% in the four sessions to 3,218.73 on Saturday, 22 March 2003 from its close of 3,084.91 on Monday, 17 March 2003. In fact, markets across the globe had surged last week on hopes that the war would be very short.