In lacklustre trading, the Sensex on Monday closed 31 points down to 17,398.98 on emergence of profit booking after a four-day string of gains and worries over monsoon.
The BSE benchmark index, which had gained over 547 points in the last four trading sessions, moved between 17,486.57 and 17,363.04 range as trading remained listless.
Brokers said market mood was partly dampened as global slowdown and deceleration in manufacturing pulled down India's May exports by 4.16 per cent to $25.68 billion.
Out of the 30-share index, 16 stocks including HDFC Bank, Bharti Airtel, Sterlite Industries and BHEL gained while 13 scrips including Sensex heavyweight ITC, Jindal Steel, HUL and Tata Motors ended lower. Reliance Industries was unchanged.
Domestic market participants were not much enthused by a better trend in global markets and also ignored an HSBC survey that showed India's manufacturing sector inched up in June.
The HSBC India Manufacturing Purchasing Managers' Index (PMI) - a measure of factory production - improved slightly to 55 in June, from 54.8 in May.
"...while headline PMI is benign, sub-indices as reflected in forward looking indicators and price indices are worrying," said Rohini Malkani, Economist, Citi India.
According to Nomura, weak monsoons are likely to add to food inflation pressures.
"Markets pared all gains and slipped into negative zone," said Shanu Goel, Senior Research Analyst, Bonanza Portfolio.
FMCG and Auto sectoral indices logged losses while Realty, Consumer Durables and PSU indices gained 1-2.3 per cent.
Analysts said FMCG shares ended lower as concerns over monsoon intensified and indicated lower sales.
However, shares of M&M and Maruti bucked the auto sector trend to gain around one per cent each.
The 50-share National Stock Exchange index Nifty closed marginally 0.30 points down to 5,278.60.