The BSE benchmark Sensex erased a chunk of its losses after hitting a fresh intra-day low, which is still down 42.52 points following selling pressure, mainly in metal, capital goods, banking and oil and gas sectors.
Buying is seen in consumer durables, healthcare, IT, technology and realty stocks ahead of the expiry of September futures and options contract today.
The Sensex resumed lower at 25,798.05 and moved in a range of 25,811.85 and 25,670.96, before quoting at 25,780.47 at 1204 hours, a fall of 42.52 points, or 0.16% per cent.
The 50-share Nifty went down 1.85 points, or 0.02 per cent, to 7,844.10 at 1204 hours.
The major losers were Coal India (down 2.79 per cent), ONGC and L&T.
However, Lupin gained 3.13 per cent, followed by Bajaj Auto, Maruti, Infosys and Dr Reddy's.
Meanwhile, foreign portfolio investors (FPIs) net bought shares worth Rs 1,330.12 crore yesterday, provisional data showed.
Overseas, the Asian market was trading lower as investors fretted over the state of the global economy. Japan's Nikkei opening for the first time since Friday after a string of holidays was trading sharply lower.
US stocks ended down slightly yesterday, led by losses in materials and energy shares as weak Chinese and US factory data added to growth worries.
