The 30-share Sensex, which lost nearly 52 points in the previous session, resumed higher at 32,341.05 and advanced to 32,354.77 in early trade.
But selling pressure suddenly emerged and dragged the gauge below the 32,000-mark briefly to a low of 31,915.20, before the index settled at 32,014.19, a loss of 259.48 points, or 0.80 per cent.
Sentiment was hurt after market regulator Sebi last night directed bourses to initiate action against 331 suspected shell companies. These scrips will not be available for trading this month, brokers said.
In a communication to the BSE, NSE and the Metropolitan Stock Exchange, the markets regulator asked them to keep the 331 shares in stage four of the Graded Surveillance Mechanism (GSM) with immediate effect.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)