Erasing its morning gains, the BSE index Sensex closed 34 points down at 18,232.06 level on profit booking amid concerns over high inflation and interest rates.
The 30-share Bombay Stock Exchange index, Sensex, which had gained over 418 points in the previous two sessions, fell 34.04 points, or 0.19 % to 18,232.06 in volatile trading, after investors locked in gains in auto, refinery and capital good stocks.
The gauge shuttled between 18,380.17 and 18,199.52 points during the day.
Reliance Industries (RIL) and Infosys Technologies-- the most valuable scrips on Sensex--fell on fresh round of selling. RIL shed 0.70 % to Rs 939.70 and Infosys edged lower by 0.28 % to Rs 2,780.20 a piece.
Brokers said investors turned cautious on concerns over rising inflation and interest rates, and preferred to book profits in heavy-weight stocks after two-session of gains, reversing an early firm trend.
Oil and gas, capital goods, oil and gas, and IT sector stocks came under pressure on fresh selling. However, gains in healthcare, consumer durables and banking stocks capped the fall.
Besides, absence of any positive cue from global market also had a negative impact on the trading sentiments here, they said.
The auto auto index fell the most by losing 1.50 % to 8,846.69 as Tata Motors dropped Rs 0.96 % to Rs 1,078.15, Mahindra and Mahindra by 5.34 % to Rs 664.60 and Maruti Suzuki by 0.54 % to Rs 1,209.05.
The oil and gas sector index ended 0.64 % to 9,480.52, while capital goods index fell 0.30 % to 12,924.77.
Bucking the trend, the healthcare index closed 2.24 % higher at 6,275.93 as Sun Pharma stocks rallied by 4.46 % to Rs 465, buoyed by company's expansion plans, while Ranbaxy Laboratories gained 4.41 % to Rs 533.70.
The banking sector index also ended in positive territory with a rise of 0.50 % to 12,281.64 as HDFC Bank gained 0.69 % to Rs 2,314 and State Bank of India by 0.07 % to Rs 2,236.
The consumer durables sector index rose 2.01 % to 6,462.98 with stocks of Titan Industries rising 3.29 % to Rs 4,314.20 and VIP Industries up by 2.63 % to Rs 764.50.