The impending arrival of earnings season provided a new story to focus even as anxiety over China continued to steal the limelight amid global growth worries.
Heavy unwinding by FIIs and release of key macro economic data like IIP and inflation also kept sentiments shaky to some extent.
Indian earnings season begins tomorrow with tech major TCS reporting its third-quarter results.
Bourses started the week on the back foot once again as cautious buying replaced last week's rampant selling with the benchmark crashing below the key 7,500-mark.
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However, equities staged a strong rebound in late afternoon trade to pare early losses firmly led by energy heavyweight Reliance and also supported by higher European markets. The benchmark had lost 4.54 per cent last week.
Elsewhere, most Asian bourses ending in deep red triggered by a massive 5 per cent slide in Chinese equities despite authorities scrapping the controversial circuit-breaker, while European equities are trading firmly higher.
The 50-share Nifty opened sharply lower at 7,527.45 and plummeted to 7,494.35 before ending at 7,563.85, showing a loss of 37.50 points, or 0.49 per cent.
Mid-cap and small-cap also lost ground substantially.
However, energy rallied by 0.82 per cent along with auto and realty.
Major laggards were ICICI Bank, TCS, HDFC, M&M, SBI, Adani Ports, Infosys, Wipro, Idea, Sun Pharma, Dr Reddys', ONGC, HDFC Bank, Cipla, HCL-Tech, L&T, BPCL and Indusind Bank.
Turnover in cash segment jumped to Rs 16,359.76 crore compared to Rs 15,936.70 crore last Friday. A total of 10,682.44 lakh shares changed hands in 72,47,729 trades. The market capitalisation of NSE stood at Rs 94,91,206 crore.