Benchmark indices fell on Monday with the BSE Sensex declining 306 points, mainly dragged down by Reliance Industries.
Foreign funds outflow also added to the overall bearish trend in equities on Monday.
The 30-share BSE benchmark fell 306.01 points or 0.55 per cent to settle at 55,766.22.
During the day, it declined 535.15 points or 0.95 per cent to 55,537.08.
The broader NSE Nifty dipped 88.45 points or 0.53 per cent to 16,631.
Bulls finally lost steam after surging ahead for the last six consecutive sessions as investors booked profit in automobile, oil & gas, and telecom stocks, even though gains in metals and select capital goods stocks capped losses.
"Investors traded with caution ahead of the Federal Reserve meet on Wednesday," Shrikant Chouhan, head of equity research (retail), Kotak Securities Ltd, said.
Among the Sensex constituents, Mahindra & Mahindra fell the most by 3.80 per cent, followed by Reliance Industries which declined 3.31 per cent after the company's June quarter earnings failed to cheer investors.
The other laggards from the pack were Maruti Suzuki India, Kotak Mahindra Bank, UltraTech Cement, Tech Mahindra and Nestle.
Tata Steel, IndusInd Bank, Asian Paints, HCL Technologies, Wipro and NTPC were among the gainers.
"RIL's results, though impressive on the telecom and retail front, fell slightly below expectations in the refining space," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.
In Asia, markets in Tokyo, Shanghai and Hong Kong ended lower, while Seoul settled in the green.
Markets in Europe were trading in the green during mid-session deals.
The US markets had ended on a lower note on Friday.
Meanwhile, international oil benchmark Brent crude jumped 1.24 per cent to $104.52 per barrel.
Foreign institutional investors offloaded shares worth Rs 675.45 crore on Friday, as per exchange data.
