Equities slipped from a 7-week high on account of modest profit-taking as investors turned a bit cautious ahead of the RBI monetary policy, with the benchmark Nifty falling 20 points on NSE here.
Global mood become all the more fragile once again as Brexit campaigners heightened financial market volatility ahead of a referendum on June 23 to decide on Britain's future in relation to the European Union even as lacklustre US non-farm payroll data dimmed prospects of a rate increase by the Federal Reserve.
Healthcare, private banks, energy and technology counters witnessed much of the selling.
PSU banking stocks were in demand after Finance Minister Arun Jaitley said the government is fully committed to supporting NPA-ridden public sector banks and they will be empowered and protected in the case of "commercially prudent" settlement of bad debt.
Firm buying was also seen in realty, auto and metal stocks, providing some respite.
Despite a better start, bourses traded range-bound and remained in a directionless trajectory for the most part of the day as investors turned cautious due to stretched valuations after rising 6 per cent in previous two weeks and ahead of the most important macroeconomic event.
Elsewhere in the region, Asian markets ended in a mixed note ahead of Federal Reserve Chair Janet Yellen's speech.
European bourses traded firmly higher on a weaker pound which provided some support to export-oriented companies despite subdued Germany factory orders.
The 50-share Nifty opened marginally higher at 8,228.75 and hovered in a range of 8,234.70 and 8,186.05 before settling at 8,201.05, a loss of 19.75 points, or 0.24 per cent.
On the sectoral front, healthcare tumbled as much as (1.20 per cent) followed by energy (0.59 per cent), IT (0.58 per cent), infra (0.43 per cent), FMCG (0.12 per cent) and banking (0.05 per cent).
However, the indices of PSU bank and realty rallied 1.35 and 0.96 per cent, respectively, along with auto and metal.
Bharti Infratel, Axis Bank, Sun Pharma, Bharti Airtel, Maruti, TCS, Reliance, Tech Mahindra, Lupin, BPCL, HDFC, Hero MotoCorp and Aurobindo Pharma were among the laggards.
The biggest outperformer was Tata Motors, followed by ITC, SBI, M&M, Yes Bank, L&T and Eicher.
A total of 843 shares declined, 726 advanced while 63 ruled stable.
Turnover in cash segment dropped to Rs 15,098.66 crore, from Rs 20,319.03 crore last Friday. A total of 7,263.34 lakh shares changed hands in 65,15,058 trades.
The market capitalisation of NSE stood at Rs 97,87,250 crore.
