THE market came sailing down to earth yesterday, ending a six-day rally. Unable to breach the 9,800-point mark, the market quickly retreated in the face of heavy arbitrage selling to close 153.13 points down at 9,600.63. The sell-off continued overnight in London with the Robert Fleming index down a further 69 points to 9,532 in early trading. Volume in Hong Kong was $3.22 billion with share turnover at 795.48 million in 28,377 deals. A key reason for the sell-off was a near absence of Japanese buying. Since Easter the Japanese have been major buyers of Asian equities because of the turmoil in their markets. But that trend may be over. Brokers said the lack of any clear leadership on the buy side at the opening created enough weakness for arbitrageurs to push the market down through futures. Heavy buying in the morning encouraged the big trading houses to sell the market. Institutional activity was whisper-quite as those big houses played it out against Hong Kong buyers. It was one of the most volatile sessions in futures trading this month, with contracts moving from a premium to a discount and back again several times throughout the day. As uncertainty again enters the market and sentiment remains mixed, traders are looking to overseas markets for direction. Brokers in the territory remain optimistic, pointing out that a break in the rally had to come some time. ''With over 700 points gained in the rally some consolidation is needed,'' said GK Securities dealing manager Bobby Ho. However, the large houses tend to be taking a bearish outlook. ''This market is not going to go anywhere above the 10,000 mark. Don't read too much into this rally,'' said one broker. Most analysts are expecting the market to continue trading between 9,800 and 9,200 unless the index can close above the 10,000 level. Prices will likely fall further at the opening today on the heels of bearish futures at yesterday's close and because few want to hold positions over the weekend. One emerging trend over the past three weeks has been foreign institutions buying well-known second liners rather than blue chips. The spate of covered warrant issues on blue chips last year has created enormous volatility in index stocks. Many foreign fund managers like the fundamentals of the market but do not want to take on the volatility of index stocks. That is the main reason why many larger second-line stocks have out-performed the Hang Seng Index in this rally. Trading yesterday was entirely futures-driven with arbitrageurs responsible for the wild swings. The market put up a good fight in the morning session, rallying and dipping several times before closing for lunch down 99.73 points at 9,654.03. By the afternoon it was obvious the market was going nowhere but down. The whipping in the morning session had investors either covering their positions or getting out completely, and the market withered to close near its low. Television Broadcasts was the sixth worst performing stock on the exchange, closing $1.40 lower at $28.40. China Light and Power finally slid back after a tremendous run, closing 50 cents down at $43.75. Hang Seng Bank returned to the cellar with a $2 fall to $52, while HSBC lost 50 cents to $92.50. Hutchison Whampoa dropped 50 cents to $33.75.