The BSE benchmark Sensex wiped off initial gains and closed 54 points down at fresh four-month low of 18,681 points on Monday as investors booked profit mainly in capital goods, auto and metal stocks ahead of monthly expiry of derivatives contract.
The 30-stock index fell for the seventh straight session by losing 54.18 points, or 0.29 per cent to 18,681.42, its lowest level since November 26, 2012.
The gauge rose to 18,950.22 at the outset. In the last six sessions, the Sensex had lost over 835 points.
Similarly, the National Stock Exchange index lost 17.50 points, or 0.31 per cent, to 5,633.85, after touching the day's high of 5,718.40.
Brokers said the market remained in bear grip ever since the DMK withdrew support to the UPA government and Reserve Bank of India indicated no room for more interest rate cut last week.
They said investors and funds were reducing their holdings in a brief trading sessions this week, before the ending of monthly expiry in derivatives segment on Thursday.
The market will remain closed on Wednesday for Holi Festival and Friday for 'Good Friday' holiday.
Selling pressure was strong enough to reduce the impact of a firming global trend as an overnight rescue deal between Cyprus and euro-area finance ministers lowered the nation's risk of default.
In 30-BSE index components, 20 stocks declined led by Larsen and Toubro, State Bank of India, ICICI Bank, Hero MotoCorp, Infosys, Reliance Industries, Bharti Airtel, GAIL India and Cipla. The stocks of Sun Pharma remained unchanged at Rs 820.30 in limited deals.
However, a gain in HDFC Ltd, HDFC Bank , Hindustan Unilver, NTPC, ONGC and Coal India saved the market from any major fall.
The capital goods sector suffered the most by losing 1.44 per cent to 8,992 followed by auto sector index by 0.78 per cent to 10,036.25. Metal index lost 0.71 per cent to 8,564.01 and banking index by 0.66 per cent to 12,781.91.
With PTI inputs