Sensex resumed lower at 16,681.89, but recovered to 16,802.90 on select buying and good capital inflows from foreign funds.
However, it declined afterwards to 16,692.44 at 1015hrs on fresh selling on the back of lower Asian cues, showing a net loss of 13.39 points of 0.08 per cent from its last close.
The NSE 50-share Nifty also moved down by 9.35 points or 0.18 per cent to 5,054.90 at 1015hrs.
Despite the markets falling yesterday, FIIs had bought shares worth Rs 412.41 crore as per provisional figures from the stock exchanges.
Major losers today were Sterlite (2.55 pc), BHEL (1.80 pc), Tata Power (1.74 pc), SBI (1.46 pc) and NTPC (1.30 pc).
Most Asian markets declined in early trade as Spain's financial problems cast fresh shadows over Europe's economic outlook. Key indices in Japan, China, Taiwan, South Korea and Hong Kong were down by up to 0.47 per cent. Markets in Indonesia and Singapore were up.