Markets slip further as investor booked profit in financials and index heavyweights ITC and Reliance Industries leading the decline.
The 50-share NSE Nifty too lost 34.50 points, or 0.33 at 10,458.35 after shuttling between 10,525.50 and 10,447.15.
This was the biggest single-day gain for Sensex since October 18 when it rose by 467.38 points.
The market rode on US Fed plans to continue the stimulus measures and China's economic reforms.
The 30-share Sensex ended down 157 points at 20,666 and the 50-share Nifty ended down 46 points at 6,141.
Markets continued their losing spree for the fourth straight seesion on Friday as investors turned cautious and booked profits.
The V-shaped rebound has been aided by a gush of liquidity flooding the global financial system, thanks to balance sheet expansion.
The broader NSE Nifty after recapturing the 9,900-mark advanced to hit a high of 9,947.80, but ended at 9,904.15, up 6.85 points, or 0.07 per cent.
The US Fed kept its near-zero benchmark interest rate unchanged.
Everything seems to be falling in place for the new RBI governor but there is a need to prepare for the imminent tapering by the Fed.
Realty, consumer durables, capital goods lead losses, Broader markets underperform.
The rupee weakened against the dollar in late trades on Thursday tracking weakness in the equity markets.
Markets will watch the policy meeting on June 18 and 19 for clues to a rollback of stimulus measures. Fed officials are divided over their ultra-easy monetary policy and some warn it could stoke future inflation and financial instability.
The current valuation of the rupee, which has breached the 64-level against the dollar, is much above the fair value seen by experts.
India's gross domestic product growth rate slipped to 7%.
Gains in IT shares and Bharti Airtel helped offset losses in HDFC Group shares.
The broader NSE Nifty reclaimed the key 10,100-mark and touched a high of 10,155.65, before finally settling at 10,124.35
BSE Metal index has spurted by almost 3% followed by counters like Banks, Realty, PSU and Oil & Gas, all gaining by 2% each.
The 30-share Sensex ended up 85 points at 19,496 after hitting an intra-day high of 19,640 and the 50-share Nifty gained 31 points to close at 5,868 after topping the 5,900 mark in intra-day trades.
Global liquidity expected to continue amid ECB stimulus
RBI is committed to bringing down retail inflation to eight per cent by January 2015 and six per cent by January 2016.
The rupee fell to a record low of 59.9350 to the dollar, breaching past its all-time low of 58.98 on June 11.
The 30-share Sensex ended at 18,719 down 526 points or 2.74% and the 50-share Nifty ended at 5,656 down by 166 points or 2.86%.
Be careful while investing at the current levels and stay away from stocks of leveraged companies.
The BSE Sensex rose on Wednesday to mark a record close as telecom firms such as Bharti Airtel surged on better-than-expected operating performance, while continued strong foreign flows also boosted sentiment.
Forex dealers said besides dollar weakening against the euro in overseas markets, higher opening in the equity market and increased foreign funds inflows mainly supported the rupee.
Stocks smashed previous records as the Sensex on Thursday raced to close at a fresh high of 30,750 zooming 448 points.
Since its peak, the S&P BSE Sensex has dropped nearly 3,000 points.
Investors will keenly watch US Fed meet starting Tuesday
The biggest gainers on both the bourses were Reliance Industries, Infosys, NTPC, ONGC, HUL, PowerGrid, Asian Paints, ITC and HCL Tech, rising up to 2 per cent.
The rupee resumed lower at 54.37 per dollar as against the last closing level of 54.07 at the Interbank Foreign Exchange Market.
While Raghuram Rajan has said in the past that other factors, including domestic fundamentals, outweigh the US Fed policy meet, this time it would be different
The American currency regained its buoyant strength after a brief sideways movement following overnight US Fed's optimistic tone about the future of the US economy
Forex dealers said besides dollar's gains against euro and yen overseas, increased demand from oil importers for the American currency and a weak opening in the stock market also put pressure on the rupee.
A weak dollar overseas ahead of a US Fed policy meeting also aided the rupee recovery while late weakness in domestic equities restricted the rupee's rise, forex dealers said.
RBI Governor has been under pressure from Finance Ministry.
Experts believe volatility is here to stay for some time, at least till China stabilises and clarity regarding the US Fed's interest rate move emerges.
A sharp fall in dollar overseas, triggered by US Fed's overnight announcement of a fresh round of quantitative easing, and sustained capital inflows into stock markets helped rupee stay in green all through the session.
Markets continued firm trades with buying interest seen in realty, metal and banking shares. The BSE Sensex has gained 386 points (over 2 per cent) at 18,407, after touching a high of 18,456. Nifty is up 118 points at 5,553.
With dollar demand rising, it dropped further to 55.49, before ending slightly better at 55.43 -- a loss of 22 paise or 0.39 per cent over Wednesday.
