The cut in Indias growth forecast by World Bank also dampened sentiment.
The NSE 50-share Nifty closed below the key 10,000-level at 9,984.80, down 32.15 points, or 0.32 per cent. It shuttled between a high 10,067.25 and 9,955.80.
Asian markets ended mixed after US market rose to record highs. European stocks were trading flat in lacklustre trade, while Spanish stocks outperformed as Catalonia's leader stopped short of declaring formal independence.
Back home, the Nifty Midcap lost 1.06 per cent while the smallcap ended lower by 1.39 per cent.
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The top three losers were PSU Bank, Realty and Media, losing 2.40 per cent, 1.93 per cent and 1.92 per cent, respectively.
Major index losers were Yes Bank, Vedanta, SBI, Tata Motors and Indiabulls Housing Finance.
Gainers were Bharti Airtel, HPCL, Bharti Infratel, IOC and TCS.
The market breadth, indicating the overall health of the market, was in favour of losers. On the NSE, 1,188 stocks declined, 521 advanced and 80 remained unchanged.
Turnover in the cash segment rose to Rs 31,335.43 crore from Rs 26,367.38 crore yesterday.
A total of 16,365.47 lakh shares changed hands in 11,028,236 trades. The market capitalisation of listed firms on the NSE stood at Rs 1,34,65,787 crore.
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