The broader NSE Nifty index too finished lower by 4.80 points, or 0.05 per cent, at 10,632.20.
Coal India was the biggest gainer on both Sensex and Nifty
The session was marked by volatility and stock-specific action, even as the overall sentiment remains risk-averse, brokers said.
Both the indices ended at their highest levels since February 1.
The broader NSE Nifty moved between 10,705 and 10,785.55, before ending 25.15 points, or 0.23 per cent down at 10,716.55.
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.
Top corporates have paid more advance tax in second quarter this year.
Persistent capital inflows by domestic institutional investors and retail investors kept the markets in fine nick
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
Costlier oil due to rising conflict in Iraq threatens to hurt the India economy that is already battling price rise and slowing growth.
The broader NSE Nifty slipped below the 10,500-mark by falling 103 points, or 0.97 per cent, at 10,482.20. It touched a high of 10,645.50 and a low of 10,464.05 during the day.
A strong set of industrial output numbers for January provided the perfect backdrop to reap more dividends, with the IIP having expanded 2.7 per cent year-on-year.
The 50-share NSE Nifty ended up 37.05 points, or 0.36 per cent, at 10,397.45 points
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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.
The NSE Nifty settled the day 38.85 points or 0.37 per cent lower at 10,500.90 after shuttling between 10,590.55 and 10,456.65, intra-day.
The NSE Nifty too recovered over 100 points, or 0.96 per cent, to end at 10,576.85.
Sentiment was largely positive after April IIP grew at 4.9 per cent, spurred by higher growth in manufacturing and mining sectors.
Coal India topped the losers' list in the Sensex pack on Tuesday, falling 2.36 per cent, followed by Bharti Airtel at 2.16 per cent.
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.
Despite a strong start to trade today, key benchmark indices retreated sharply from their higher levels following bouts of profit-taking amid fresh weakness in the rupee against the dollar.
A declining rupee, elevated crude oil prices and sustained foreign fund outflows added to the gloom
Muted quarterly earnings, mixed cues from global markets and unabated foreign fund outflows added to the volatility
Banking stocks felt the heat due to worries that the lending rate cuts will hit their bottom line
Investor sentiments remained upbeat tracking global developments as the US, China geared up for trade talks due this week.
The 50-stock NSE barometer Nifty finished 22.50 points, or 0.21 per cent, down at 10,526.20
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.
The broader NSE Nifty gained 22 points to 10,480.60
Oil & gas, banking and pharma sector stocks stole the show
The broader NSE Nifty too fell below the 10,100 level by dropping 100.10 points to end at 10,094.25
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The sentiment got support from better-than-expected earning results by select companies and continuous buying by domestic financial institutions.
The BSE Sensex zoomed 318 points to end at 33,351.57, while the broader Nifty spurted 88 points to 10,242.65.
Legislative process in the country is unduly long and tedious
Sun Pharma was by far the biggest gainer in the Sensex pack, surging 8.13 per cent, followed by Dr Reddy's at 4.92 per cent.
Covering-up of short positions ahead of Thursday's expiry of August series in the derivatives segment gave equities a slight push
Home prices firm up in 2015 in India.
Muted global trend after a report that US President Donald Trump was preparing to impose more tariffs on China hurt trading sentiments.
Among the gainers, Sun Pharma topped by rising 3.03 per cent as the weak rupee tempted buyers to accumulate shares of pharma exporters.
Most of the session's gains for both the indices were wiped out as investors rushed to book profits ahead of F&O expiry on Thursday and also due to concerns over stretched valuations.