Benchmark Sensex surrendered early gains to end over 194 points lower at 32,389.96 in a special Muhurat trading session today to mark the beginning of Hindu Samvat year 2074.
Banking stocks led the fall as participants booked profits to write their first entry with gains on the first session of Samvat 2074, brokers said.
The broader NSE Nifty too dipped below the 10,200-mark in the special one-hour Muhurat session.
The BSE Sensex opened higher at 32,656.75 and advanced to a high of 32,663.06 on token buying activity as investors and funds opened their new accounts on the first session of Samvat 2074.
However, higher levels could not be sustained due to sudden sell-off by participants and the index slipped to 32,319.37, before settling 194.39 points, or 0.60 per cent down at 32,389.96.
The gauge had lost 49.29 points in the previous two sessions.
On similar lines, the broad-based NSE Nifty index, after shuttling between 10,211.95 and 10,123.35, ended 64.30 points, or 0.63 per cent lower at 10,146.55.
A weak trend at the European stock markets on Spain's escalating political crisis also fuelled selling towards the fag-end at the domestic bourses here, brokers added.
The Sensex gained 4,642.84 points, or 16.61 per cent, in the Hindu Samvat year 2073, while the broader NSE Nifty surged 1,572.85 points, or 18.20 per cent.
The laggards in the Muhurat session were banking, metal, PSU, infrastructure, power, oil & gas, auto, consumer durables, healthcare, realty, FMCG and IT sectors.
The broader markets outperformed the overall trend as investors created fresh positions, lifting the BSE small-cap index by 0.54 per cent and mid-cap index by 0.17 per cent.
Both the exchanges will be closed tomorrow for 'Diwali Balipratipada'.
Globally, in the euro zone, Frankfurt's DAX fell 0.63 per cent, while Paris CAC 40 shed 0.54 per cent. London's FTSE too fell 0.35 per cent.
In the Asian region, Hong Kong's Hang Seng fell 1.92 per cent, Shanghai Composite Index slipped 0.34 per cent, while Japan's Nikkei ended 0.40 per cent higher.