Coal India fell the most by 2.58 per cent among Sensex scrips, dragging the index into the negative zone.
Infosys slipped nearly 9% after the company cut full year revenue outlook for FY17.
The Nifty gained 62 points to close at 3,178.
Asian shares have begun the week on a plaintive note.
Yes Bank was the top gainer in the Sensex pack, surging 3.76 per cent, followed by SBI at 3.18 per cent.
The Nifty finished the day at 10,265.65, a hefty gain of 98.95 points, or 0.97 per cent, after shuttling between 10,270.85 and 10,195.25.
The wider Nifty hit a low of 10,033.35 before finishing at 10,044.10, down 74.15 points or 0.73 per cent.
Nifty PSU Bank index gained 1% led by Allahabad Bank, Andhra Bank, Syndicate Bank and IDBI Bank
The broader NSE Nifty closed 1.25 points, or 0.01 per cent down at 10,564.05.
Sustained FII inflows and fresh spell of buying by domestic institutional investors fuelled the rally
With global crude prices softening and the govt taking steps to curb inflation, the Indian growth story still has some steam left in it.
Profit-booking by participants in view of the domestic markets' recent record-setting run fuelled the downtrend
Covering-up of pending short positions on expiry of the July derivatives contracts and a strengthening rupee propped up the markets at high levels
Investors were anxious concerned about the uncertainties over the timing of Us Federal Reserve rate hike, US policies under President Donald Trump, the upcoming French election and rising crude price that could impact inflation, going ahead. A weak closing in Asia tracking overnight losses in the US owing to all these unknowns triggered selling, brokers said.
BSE Bankex and Telecom indices led the fall.
Small- and mid-cap stocks continued facing selling pressure due to stretched valuations.
Geo-political concerns over death of a Saudi journalist, Brexit and likely breach in Italy's budget also kept investors cautious.
The breadth, indicating the overall health of the market, turned negative. On the BSE, 1,581 shares declined and 1,246 shares fell. A total of 165 shares were unchanged.
The broader NSE Nifty dipped below the 10,200-mark to hit a low of 10,180.25 before ending at 10,195.15, down by 165 points, or 1.59 per cent.
HDFC, ONGC, Maruti Suzuki, HeroMoto Corp and Bajaj Auto gained the most on BSE Sensex
Sun Pharma was the biggest gainer in the Sensex pack, advancing 1.79 per cent.
The wider NSE Nifty touched a low of 10,652.40 before finishing at 10,671.40, showing a loss of 97.75 points, or 0.91 per cent.
Nifty ends above 8,600; Tata Motors, RIL top leaders
The NSE Nifty cracked below the 10,800-mark to hit a low of 10,753.05 intra-day, before closing at 10,762.45 with a loss of 59.40 points, or 0.55 per cent.
The NSE Nifty, which dipped below the key 10,800-mark to touch a low of 10,755.40, bounced back on late buying to close at 10,817.70, up 9.65 points, or 0.09 per cent.
The S&P BSE Midcap and the S&P Smallcap indices rallied over 1% each
In the broader market, the S&P BSE Midcap ended 0.1% down, while the S&P BSE Smallcap index gained 0.3%.
Major gainers which contributed to the Nifty were ICICI Bank, State Bank of India, Reliance Industries, ONGC, Tata Consultancy Services, Infosys, Bajaj Auto, Tata Power and Larsen and Toubro.
The 50-share NSE Nifty too closed down 168.30 points, or 1.58 per cent, at 10,498.25 -- a level last seen on January 3 when it closed at 10,443.20.
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.
This is its biggest single session fall since August 24, 2015, when it had lost 1,624.51 points.
Pharma was the top losing index amid worries about their earnings outlook with Lupin down over 4%
The broader NSE Nifty too reclaimed the key 11,500-mark. It touched a high of 11,562.25, before finally settling at 11,536.90, showing a gain of 59.95 points, or 0.52 per cent.
The market breadth, indicating the overall health of the market, was positive
On the BSE, 1,650 shares declined and 1,188 shares rose
The 30-share barometer remained up throughout and hit a high of 29,070.20, powered by a rally in RIL and other blue-chips. The index ended 215.74 points up, or 0.75 per cent, at 29,048.19 -- its highest closing since March 5, 2015, when it had closed at 29,448.95.
Sentiment continued to be weighed down by the government's move last week to withdraw high-value currency notes and disappointing quarterly earnings by some more blue-chip companies, brokers said.
A reading above 50 indicates expansion, while a score below this mark means contraction
The session was marked by volatility and stock-specific action, even as the overall sentiment remains risk-averse, brokers said.
