Market took a breather after a four-day long rally with profit booking at higher levels dragging the benchmark Sensex by 88 points to 12,366.39 at the end of Tuesday's trading session.
The Bombay Stock Exchange's 30-share barometer index had added 280.51 points in the last four sessions.
Brokers attributed the bout of selling in afternoon trade to a cautious approach adopted by the investors ahead of the third-quarter corporate earnings results as well as weak opening trends in the European markets.
The BSE sensitive index opened in positive territory at 12,473.79, as against last Friday's close of 12,454.42, and moved erratically in a range of 12,489.28 and 12,343.80 before ending 0.71 per cent down at 12,366.39.
National Stock Exchange's Nifty also dipped 18.80 points or 0.52 per cent to 3,569.60, from its previous close of 3,588.40.
Robust economic growth of 8.9 per cent in the first quarter of the current fiscal and fall in inflation rate could not stem the downslide in share prices, dealers said.
Auto stocks were in limelight with some gains in the morning session on the back of good monthly vehicle sales figures recorded by most of the automakers for September.
However, auto stocks failed to sustain their early gains with profit booking taking hold of market sentiments in the afternoon session.
Pharma, IT and refinery stocks also moved down on the back of profit-selling, the brokers added.
Sensex heavyweights like RIL, HDFC, BHEL, Infosys, HLL, TCS, ONGC and Maruti registered sharp losses, while weighing sharply on the 30-share index.
Though the index landed in deep red, market breadth was positive with gainers outnumbering losers by 1,413 to 1,052 margin of the total 2,534 traded shares.
The trading volume dropped sharply to Rs 3,093.80 crore from Rs 3,705.68 crore last Friday. Mahindra Gesco topped the list of highest traded securities with a turnover of Rs 82.03 crore followed by Tata Steel (Rs 73.56 crore), Rel Capital (Rs 72.70 crore), RIL (Rs 60.40 crore) and Adi Birla Nuvo (Rs 57.37 crore).
The broad-based BSE-100 Index dipped by 32.51 points to 6,295.82 from previous close of 6,328.33.
The BSE-200 Index and the Dollex-200 were quoted modestly down at 1,489.46 and 541.47 at close compared to the last close of 1,495.48 and 541.85, respectively. The BSE-500 Index declined by 15.06 points to 4,724.61 from previous close of 4,739.67 and the Dollex-30 ended lower at 2,216.89 from 2,225.26.
RIL tumbled by 9.70 to 1161.35, HDFC by 57.00 to 1477.30, BHEL by 23.55 to 2392.85, Infosys Tech by 30.25 to 181.65, HLL by 6.80 to 249.40, ONGC by 11.15 to 1158.90, Maruti by 13.20 to 968.00, TCS by 7.10 to 1014.50, L&T by 20.75 to 1252.30, Ranbaxy by 11.40 to 428.45, ACC by 2.60 to 990.70, Bharti Airtel by 2.40 to 466.45, Cipla by 6.60 to 255.65, Dr Reddy by 4.10 to 727.20, HDFC Bank by 5.15 to 920.85, Hero Honda by 2.85 to 771.70, ICICI Bank by 2.60 to 696.45, Wipro by 5.40 to 519.20 and Tata Steel by 1.15 to 534.50.
However, Bajaj Auto rose by 40.20 to 3031.30, Tata Motors by 7.60 to 869.65, NTPC by 3.00 to 133.20, Satyam Computer by 3.55 to 822.10, REL by 3.15 to 486.70 and SBI by 4.95 to 1033.25.