Benchmark share indices ended lower amid a volatile trading session Tuesday tracking weakness in Asia with index heavyweight Reliance Industries and Tata Motors leading the decline.
The Sensex ended down 97 points at 15,873. Earlier in the day the index moved within a range of 16,049 - 15,799.
The Nifty ended down 29 points at 4,750.
Meanwhile in Asia, the Nikkei fell below its 25-day average and ended 0.5% lower at 8,440.
With many overseas investors on year-end holidays, market participants said it had been difficult to buy risk assets though the re-opening of stock trading in the United States later in the day could provide more direction.
Markets are likely to remain volatile for the next few days as traders roll over positions in the derivatives segment on Thursday.
Foreign funds bought shares worth Rs 113.43 crore on Monday as per provisional data from the stock exchanges.
"Today we tested the psycholical mark of 4800 (high 4801) and then have been in sideways territory.
Holiday season and testing of a pyschological as well as technical target has led to lowering of momentum.
However as its the last week of the year and also Derivatives expiry, momentum is expected to return for the rest of the week," said Ranak Merchant, Technical Analyst - Strategies, Sushil Financial Services.
All the sectoral indices were in red. Realty shares fell on profit booking after recent gains.
BSE realty index dropped 1.6% to 1,427.
Metal, power and bankex also dropped over 1% each in trades.
Reliance was the top dragger along with Tata Motors and Infosys - accounting for a 34
Tata Motors ended down 2.4% at Rs 181.90 after the company asked an estimated 140,000 Nano owners to bring back their cars for change of the starter motor free of cost.
DLF shed 2.7% to Rs 191. Cipla and Tata Steel slipped 2.5% each, followed by Coal India and NTPC. Jaiprakash Associates, Tata Motors amd BHEL were some of the other major losers.
SBI shed 1.3% to Rs 1,643. The bank, along with a few others such as Kotak Mahindra Bank, announced a sharp hike in interest rates offered on non-resident external (NRE) deposits.
Meanwhile, Tata Power held on to gains and ended up 2% at Rs 90. Bajaj Auto and ONGC added 1% each. Larsen & Toubro advanced marginally on reports that its shipbuilding arm will sign a technological and licensing agreement with Japan's Mitsubishi Heavy Industries.
Integrated (Mauritius) Healthcare Holdings, an arm of Malaysian sovereign fund Khazanah Nasional Bhd, has converted global depositary receipts worth Rs 213.80 crore into equity shares in Apollo Hospitals Enterpises.
This took shares of Apollo Hospitals up 2% to Rs 605.
Reliance ADAG stocks rose in volatile trade today on hopes of a reconciliation between the Mukesh and Anil Ambani. Both the brothers are expected to come for the opening of a memorial of their late industrialist father on his 80th birth anniversary to Chorwad tomorrow.
Reliance Capital and Reliance Infra added 0.5% each while Reliance Communications soared 5%.
Five multiplex shares rose on hopes that the festive season and new releases would bring in more viewers.
Fame India, Inox Leisure, Cinemax India, Reliance MediaWorks and PVR edged higher by 1-20% each.
