The 50-issue NSE Nifty too cracked below the 10,400-mark and hit a low of 10,323.90 before finishing 99.50 points, or 0.95 per cent down at 10,358.85.
On the job front, Indian service providers continued to add to their payrolls and the sector witnessed the second-strongest increase in employment since March 2011.
However, predictions that economic conditions will normalise after the elections underpinned optimism regarding the outlook and supported a stronger upturn in employment.
The headline seasonally adjusted Nikkei India Composite PMI Output Index, that maps both the manufacturing and services sectors, rose from 53.3 in June to 54.1 in July.
The seasonally adjusted Nikkei India Services Business Activity Index fell to 50.2 in May, from 51.0 in April, pointing to the slowest growth rate in the current 12-month stretch of expansion.
Business confidence remained positive in August and was driven by upbeat forecasts of sales, an expected improvement in demand and promotional activities
The survey noted that advertising campaigns supported the increase in new work growth in the sector amid competitive pressures.
The improvement in business conditions promoted job creation, while confidence towards the year-ahead outlook for activity was at a four-month high during March.
A reading below 50 means contraction in the sector.
The broader NSE Nifty rose nearly 124 points to settle just below the psychological 11,000 level.
The Sensex has now lost 878.32 points in six sessions -- its longest string of losses in six months.
It was the second straight week of gains for the benchmarks.
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