Benchmark Sensex gave up all its early gains to end 81 points lower on Monday, dragged by losses in financial stocks as lenders beefing up provisions against COVID-19 risks stoked slippages worry.
Besides, spiking COVID-19 cases in the country and tepid cues from global markets weighed on investor sentiment.
After gyrating over 800 points during the day, the 30-share index settled 81.48 points or 0.26 per cent lower at 31,561.22.
Similarly, NSE Nifty fell 12.30 points, or 0.13 per cent, to 9,239.20.
ICICI Bank was the top laggard in the Sensex pack, cracking over 5 per cent, followed by Kotak Bank, HUL, HDFC, IndusInd Bank, HDFC Bank and Nestle India.
On the other hand, Hero MotoCorp, Bajaj Auto, Maruti, TCS and HCL Tech were among the gainers.
Joining peers, ICICI Bank made COVID-19 related provisions of Rs 2,725 crore to further strengthen the balance sheet -- causing worries on fiscal slippages front.
"Indian market opened on a positive note following global cues as trade-war fears receded and more countries announced plans to ease their lockdown restrictions amid hopes of global economies reopening,� said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.
The traders also took note of Prime Minister Modi's meeting with chief ministers of all states which is expected to discuss the plan for exit from the ongoing nationwide lockdown to prevent the spread of coronavirus.
However, the market couldn't hold the strength during the day as selling pressure was witnessed in heavy index weighing sectors like financial and bank stocks, erasing majority of gains in afternoon session as COVID-19 related one time provision were seen undercutting the earnings on the financial companies, he added.
Globally, bourses in Hong Kong and Tokyo ended on a positive note, while this in Shanghai and Seoul closed with losses.
Stock exchanges in Europe were trading significantly lower in early deals.
International oil benchmark Brent crude futures were trading 2.39 per cent lower at USD 30.23 per barrel.
On the currency front, the rupee slipped 19 paise to close at 75.73 against the US dollar.
In India, the death toll due to COVID-19 rose to 2,206 and the number of cases climbed to 67,152, according to the health ministry.
Globally, the number of cases linked to the disease has crossed 41 lakh and the death toll has topped 2.82 lakh.