Mumbai, June 7 (IANS) Indian shares dipped for the third consecutive day Wednesday on panic selling by investors after rising in the initial hour of trading that took a key market index above the psychologically important level of 10,000 points.

After ending below the 10,000-point mark at 9,957.32 points Tuesday, the 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose to the day's high of 10,051.81 points within an hour of trading Wednesday.

But then began a steady fall till about 2.30 p.m. that saw the key index touch the day's low of 9,609.21 points. And after a bout of erratic trading, the index finally settled at 9,756.76 points.

At this level, the index was down 200.56 points, or 2.01 percent, to register losses for the third straight day.

Sensex had lost 256.16 points, or 2.5 percent, Tuesday, and 237.85 points, or 2.28 percent, the day before.

Twenty-eight shares that make up the Sensex basket ended in the red and only two managed to close in the positive territory.

In the past week, the key index has shed 641.85 points or 6.17 percent, and the loss in the past one moth is 2,602.94 points or 21.06 percent.

"In the absence of any positive trigger, the bears are having a field day. In the process, investors are scared to take any fresh positions. Even minor gains are resulting in profit-taking," an analyst with a brokerage here said.

Interestingly, the fall on the first two days of this week occurred in spite of foreign funds turning net buyers. Latest data with the markets watchdog Securities and Exchange Board of India (Sebi) shows these funds bought equities worth $269.5 million Monday and Tuesday.

Among the Sensex shares, the two that managed to end in the positive territory were Bharti Televentures, up 2.39 percent at Rs.353.85 and Housing Development Finance Corp., up 0.11 percent at Rs.1,165.00.

Larsen and Toubro led the losers, down 6.59 percent at Rs.1,988.30, followed by Ranbaxy Laboratories, down 5.97 percent at Rs.365.25, National Thermal Power, down 5.38 percent at Rs.100.25, and Reliance Energy, down 4.99 percent at Rs.403.75.