Markets seesawed for the most part of the day and ended in the negative on back of weakness in FMCG and Banking stocks. After hitting a high of 20,560 and a low 20,383.
The Sensex ended near day's low at 20,408, down 68 points and the Nifty also declined 14 points to close at 6145.
Asian markets ended on a weak note following a weak close on Wall Street after Federal Reserve signaled further purchases to the bolster the economy and earnings downgrades.
The Taiwan Weighted and Seoul Composite ended down 0.6% and 0.2% each. Singapore's Straits Times closed down 0.1%, Hong Kong's Hang Seng also ended lower by 0.2% on account of profit booking in property shares.
Japan's markets bucked the trend, the Nikkei Average gave a thumbs up to the rate cut by Bank of Japan, closed up 1.5% at 9,518.
Bank of Japan voted to cut the overnight call rate between zero to 0.1%, from 0.1% previously and also ensured further monetary easing.
European markets were also trading higher led by rally in retailers after strong earnings from Tesco PLC.
However, Euro-zone September composite Purchase Manager Index which slipped to 7 month low weighed on the markets. FTSE 100 index rose 0.5%, DAX 30 index was up 0.3% and French CAC-40 was up 0.6%.
Technical Analyst Devangshu Datta said that Nifty will probably trade in the range of 6150-6200. Kishor Ostwal, CMD, CNI Research expects Nifty to correct by 5-7% before scaling to new high of 7300.
"The next stage has commenced and doors are opened for new target of 7300 to 7800 for Nifty when markets crossed 5600, wave V of the rally has begun," Ostwal Said.
BSE Banking and FMCG indices weighed on the markets, down 5% and 1%
Colgate Palmolive was down 1% at Rs 881.
BSE Consumer Durables index was the top gainer, up 1.4% to 6,529. "There is still some upside left in consumer durables stocks like VIP INdustries, Wim Plast and Supreme Industries," Oswal Said.
Bajaj Electricals from teh consumer durables pack surged over 5% to Rs 317. VIP Industries and Rajesh Exports gained 3.6% each at Rs 777 and Rs 108, respectively. Videocon Industries and Whirlpool were up.
ADAG group stocks shone on the market today. Reliance Communications and Reliance Infrastructure gained over 3% at Rs 178 and Rs 1,115, respectively.
Jaiprakash Associates added 2.3% to Rs 130. ACC was up 1.7% at Rs 1,030.
Mahindra & Mahindra, Maruti Suzuki were among the auto winners. Jindal Steel, Tata Power, BHEL and Reliance also advanced in trades.
However, HDFC dropped 2.3% to Rs 741. HDFC Bank, Hindustan Unilever and Bharti Airtel shed around 1.5% each.
Hindalco, ITC, ICICI Bank, Wipro and Sterlite were among the losers.
BSE market breadth was positive. Out of 3,104 stocks traded, 1,672 advanced while 1,290 declined.
Reliance topped the value chart with a turnover of Rs 112.26 cr, followed by Reliance Capital, SBI, Pipavav Shipyard and Tata Steel.