higher but moved in a narrow range of over 140 points before concluding 13.34 points lower at 18,670.34 -- extending the string of losses to three straight days.
In the 30-share Sensex, 19 stocks declined led by two most influential stocks, ITC and RIL that fell over 1% each. Tata Steel, which fell 1.93%, was the worst performer among the Sensex constituents. The falling trend was cushioned to some extent as HDFC Bank, SBI, TCS and Bharti Airtel logged 0.8-1.4% gains.
Brokers said investors were seen adjusting their portfolios ahead of a special 'Muhurat' trading on Diwali tomorrow, followed by a holiday on Wednesday.
Meanwhile, non-index entity United Spirits today surged by 34.93% to Rs. 1,834.60 after Diageo agreed to buy a controlling stake last week.
The broad-based National Stock Exchange index Nifty eased by 2.55 points, or 0.04% to close at 5,683.70.
Consumer durable, banking and realty shares attracted buying while metal and capital goods stocks ended lower.
The sentiment remained bearish on the last day of Samvat 2068 on an unexpected 2.5% contraction in September industrial output, marginally high consumer price index at 9.75% and trade deficit widening to an all-time high of $20.96 billion as October exports fell to $23.2 billion.
A mixed trend in Asian region and lower opening in Europe on earning concerns further soured the market sentiment.
There will be a special 75-minute 'Muhurat' trading on Diwali between 1545 hrs and 1700 hrs to start Samvat 2069.
The Sensex has risen by around 8.2% in Samvat 2068.
Trading activity was also tepid on Monday with data showing FIIs sold shares worth a net Rs. 204.24 crore last Friday.
"Indices opened on a flat note and made initial highs. Soon afterwards, the indices was seen drifting to lower territory and selling pressure increased after IIP data announcement," said Nidhi Sarswat, Senior Research Analyst, Bonanza Portfolio.
Globally, Asian stocks ended mixed with downward bias after reports said Japan's economy shrank at the fastest pace since last year's earthquake, overshadowing an acceleration in China's exports.
Key indices from Japan, Singapore, South Korea and Taiwan ended with losses while those from China and Hong Kong closed with gains.
In Europe, France's CAC was quoting lower by 0.14% in afternoon trade while Germany's DAX and the UK's FTSE were up 0.19-0.22%.
Back home, major losers from the Sensex pack included Tata Steel (1.72%), Hero MotoCorp (1.67%), ITC (1.56%), Tata Power (1.43%) and Jindal Steel (0.95%).
However, Bharti Airtel rose by 1.63%, SBI by 1.59%, TCS by 0.66% and Infosys by 0.48%.
Among sectoral indices, BSE-Metal declined by 0.70% and BSE-CG by 0.67% while BSE-CD rose by 1.13%, BSE-Bankex by 0.94% and BSE-Realty by 0.87%.
The market breadth remained negative as 1,461 counters closed lower while 1,334 scrips ended higher.
The total turnover shot up to Rs. 3,732.07 crore from Rs. 2,606.97 crore last Friday.
"In the coming days, Nifty supports come around 5620. On the otherhand, a upside break above 5820 (futures) would result in resumption of up rally," said Milan Bavishi, Head Research, Inventure Growth & Securities.