Benchmark share indices ended the last trading day of 2011 on a weak note due to selling pressure in index heavyweight Reliance Industries.
The Sensex ater touching a high of 15,694 in morning deals, erased gains and slipped to a low of 15,407.
The index finally ended down 89 points at 15,454 - posting its first annual loss in three years.
The Nifty ended down 22 points at 4,624.
For the calendar year 2011, the Sensex and Nifty ended down 24.6% each, compared to their previous close on December 31, 2010.
Foreign institutional investors sold shares worth Rs 1015.82 crore on Thursday as per provisional data from the stock exchanges.
Markets would be looking at corporate earnings which will start trickling in mid-January for direction going forward.
On the global front, Asian stocks ended their first losing year in three on Friday, having shed nearly a fifth of their value as Europe's debt crisis and financial turmoil took a toll on investors' risk appetite, driving them to safer assets such as the US dollar and gold.
Nikkei ended higher today but was down 17% for the year. European markets were flat. Dow Jones futures lost 29 points.
Most of the sectoral indices ended in the red with the BSE oil & gas index slipping 1.4% to 7,536 as Reliance erased morning gains.
BSE realty, metal and bankex shed around 1% each.
However, the PSU index continued to be firm and was up 1% at 6,365.
Reliance Industries slipped 2.8% to end below Rs 700 mark at Rs 693 - its lowest level since 23 March 2009, on concerns of falling gas output from KG-D6,
From the metal pack, Jindal Steel, Sterlite and Tata Steel dropped 1-2% each.
Tata Power, DLF, SBI and ICICI Bank were the other major losers. FMCG stocks were down with ITC slipping 0.4% while Hindustan Unilever dropped 1.3% at Rs 408.
"In the short term we have seen massive performance for HUL.
"It's a time to take profit on medium to short term positions but for long term (12 months) stocks is attractive at current and more on declines up to 380.
ITC will remain range bound between 220/190. FMCG as a pack is very strong and we should be buyer," said Shrikant Chouhan, Sr. Vice President (Technical Research), Kotak Securities.
On the other hand, Coal India was up 0.7% at Rs 301. IT shares advanced. Infosys added 0.8% and Wipro moved up 0.1% in trades.
Public sector undertakings (PSU) such as State Trading Corporation (STC), Hindustan Copper, Dredging Corporation and MMTC rallied more than 14% each on the back of huge volumes.
The turnover of the 23 commodity exchanges in the country has risen by 67% to Rs 130.57 lakh crore in the current fiscal till December 15 on account of increased participation in gold and silver trading, the Forward Markets Commission (FMC) has said.
The market breadth turned weak with 1,441 shares declining with 1,331 shares advancing.
A total of 2,912 shares were traded on the BSE today.
