Markets ended in the red due to selling pressure in index heavyweights and weakness across Europen markets ahead of the new bailout plan for Greece.
The Nifty index opened in the red and touched a high of 5,579 in the morning session.
However, losses in index heavyweights-Reliance Industries, HDFC Bank and State Bank of India dragged the Nifty to a low of 5,532.
The index closed near day's low at 5,542, down 25 points and the benchmark Sensex ended at 18,436, down 66 points.
Amit Chedda- Head of Equity from Inventure Growth and Securities said, "Going forward, Nifty has resistance at 5680-5750 and supports at 5550-5460.
Overall, view on the markets stays neutral as there is no definite trend in the market." The Nifty has been consolidating in the range of 5550 and 5650 since the last seven trading session.
Markets across Asia posted losses after China's HSBC's preliminary Purchasing Managers index; an indicator of manufacturing activity fell to a 28 month low of 48.9 in July.
China's Shanghai Composite declined 1%, Hong Kong's Hang Seng was off 0.1% and Japan's Nikkei Stock Average was flat 0.02%.
FTSE, CAC and DAX indices in Europe were down between 0.7%-0.9% ahead of the Euro-zone's leaders meeting over second bail out for Greece.
Back in India, food inflation eased to 7.6%, slower than 8.3% rise seen in the previous week.
However, the Reserve Bank of India may continue its policy tightening activity next week; economists expect 25 bps rate hike as Inflation accelerated to 9.4%
Consecutive rate hikes have caused analysts' to scale down India's growth expectation to sub 8% for FY12.
Among individual stocks Kotak Mahindra Bank, the private sector lender slipped 3% to Rs 476 after it posted profit of Rs 416 crore for the June quarter, up 27% compared to Rs 328 crore for the same quarter last year.
Biocon, top listed biotechnology ended down 2% at Rs 363.
Earlier in the day it touched a low of Rs 348 after it reported lower than estimated rise in the first quarter profit at Rs 70 crore versus Rs 65 crore during the same time last year due to lower licensing income.
Hero Honda was in the top gear, up 1.6% at Rs 1,789 after net profit surged 13% to Rs 558 crore led by strong demand and robust volume growth.
Road developer IRB Infrastructure fell 1.5% and IVRCL Infrastructure was down 3.1% on reports that Income Tax department raided the company offices in some cities.
BSE Consumer Durables index and realty index declined 2.2% and 1.4% each.
Top losers from the Consumer Durables were Whirlpool, down 3.3%, Titan Industries lost 3.1% and Blue Star was off 3%.
Top losers from Realty index were Orbit Corporation, down 4%, Anant Raj Industries was down 3.2% and Indiabulls Real Estate declined 2.4%.
From the broader markets, the midcap and the smallcap indices fell 0.4% each.
Market breadth was positive as 1187 stocks advanced for 1643 stocks which declined.
