The restraint on part of investors was chiefly because of RBI's minutes of its December policy meeting, which showed that some members were concerned about rising oil prices, its inflationary impact and possibility of fiscal slippage.
The Sensex has now lost 878.32 points in six sessions -- its longest string of losses in six months.
Last fortnight, 206 companies from the BSE-500 hit 52-week lows as investors sold heavily in counters with dimmed prospects.
Financials declined amid profit taking while energy shares fell after the government hiked excise duty on transport fuels.
The market breadth ended weak on the BSE with 2,086 shares declining and 893 shares advancing.
The 30-share Sensex, after opening on a strong footing, continued its upward march to hit an all-time high of 35,827.70. The NSE Nifty also hit a record intra-day high of 10,975.10, before finishing at 10,966.20, up 71.50 points.
The BSE Sensex gained 104.63 points to end at 33,147.13, while the broader Nifty spurted 48.45 points to finish at 10,343.80.
Caution prevailed across the bourses ahead of the Union Budget.
Markets closed in the red on domestic worries.
But the 30-share Sensex rose by 141.52 points, or 0.41 per cent, to close at 34,297.47. The broader NSE Nifty gained 44.60- points, or 0.42 per cent, to end at 10,545.50 after touching a high of 10,618.10.
Fresh buying by domestic institutional investors and better-than-expected June quarter results from some blue-chip companies boosted investor sentiment
The 30-share Sensex ended 53 points higher at 28,439 and the 50-share Nifty closed 18 points higher at 8,494.
Top gainers from the Sensex pack are ONGC, HDFC, HUL, RIL and Cipla.
Metal shares gained on hopes that the government may adopt ordinance route for mines sector reforms
The BSE Sensex was down 326 points at 23,277 and the Nifty was down 107 points at 7,056.
Sentiment was largely positive after April IIP grew at 4.9 per cent, spurred by higher growth in manufacturing and mining sectors.
The 30-share Sensex ended higher by 177.46 points at 28,885.21 and the Nifty gained 63.90 points at 8,778.30.
The Sensex ended up 48 points at 28,386 and the Nifty gained 13 points to close at 8,476.
Sensex ended up 41 points at 29,136 and Nifty gained 4 pts to 8,809.
Benchmark indices finished higher on hopes of economic reforms
The broader markets ended mixed with mid-caps gaining 0.1 per cent and small-caps falling 0.1 per cent on the BSE.
Pharma shares extended losses after the government's ban on combination drugs.
This surpassed its previous record close of 29,974.24, reached on April 5.
The 50-issue NSE Nifty too cracked the 10,200-mark and hit a low of 10,108.55 before finishing 104.75 points, or 1.02 per cent down at 10,121.80.
Markets snapped their 8-day winning streak.
The S&P BSE Sensex surged 217 points to end at 25,736.
Sensex lost 76 points to end at 25,589 while Nifty shed 23 points to end at 7,649.
ONGC was the top gainer which surged over 4% followed by Axis, SBI, CIL
Sentiments took a hit after broader Asian markets weakened, following a renewed sell-off on Wall Street on Tuesday as energy shares dropped after crude oil prices plunged to a 13-month low amid weak earnings and US-China trade disputes, fuelling worries about economic growth
Metal shares were the top gainers with Hindalco up over 5%.
BSE Sensex on Monday closed nearly 34 points higher at 26,350.17 with gains in realty, power, FMCG and oil & gas stocks amid sustained buying by domestic institutional investors.
Traders said falling crude prices in the global market was a big boost for the economy as it lightens the country's import bill burden, eases inflation and current account deficit concerns.
The broader NSE Nifty, after shuttling between 10,651.60 and 10.532.70 points on alternate bouts of buying and selling, closed 6.20 points, or 0.06 per cent, down at 10,576.30.
After a volatile session, Sensex closed the day 563 points lower
The NSE Nifty after shuttling between 10,441.90 and 10,341.90, ended 6.15 points, or 0.06 per cent down at 10,380.45.
Shares of ING Vysya Bank and Kotak Mahindra Bank rallied by up to 6% on the BSE on reports that Kotak Mahindra Bank in final stages to buy the bank.
Interest rate sensitive stocks gain ground post decision
At 15.05 PM, the 30-share Sensex was up 281 points at 28,238 and the 50-share Nifty gained 86 points at 8,577
Investors have kept their eyes on US-China trade talks and are optimistic about a positive outcome.
Investor sentiments remained upbeat tracking global developments as the US, China geared up for trade talks due this week.