Moreoever, there was a weak trend at other Asian markets, tracking overnight losses at the Wall Street amid rising geopolitical tensions in the Korean peninsula after North Korea called off talks with South Korea.
Brokers said investor sentiment was subdued following uncertainty over government formation in Karnataka, which has thrown up a hung verdict.
The 30-share Sensex opened lower at 35,452.35 points and moved between 35,241.63 and 35,543.89 before settling lower by 156.06 points, or 0.44 per cent, at 35,387.88.
Yesterday, the gauge had soared more than 400 points intra-day after the BJP emerged as the single largest party in Karnataka. However, it gave up all gains to end modestly lower after the Congress unexpectedly stitched up a post-poll alliance with the JD(S) and staked claim to form the government.
The 50-share NSE Nifty too stayed in the red through the session and finally settled 60.75 points, or 0.56 per cent down at 10,741.10. Intra-day, it moved between 10,699.70 and 10,790.45.
On the macro front, trade deficit widened to USD 13.7 billion in April, which further affected momentum.
Foreign portfolio investors (FPIs), who have been net sellers in the past few sessions, sold shares worth a net Rs 518.47 crore, while domestic institutional investors (DIIs) bought shares worth Rs 531.33 crore yesterday, according to provisional data.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)