The BSE Sensex dropped morning gains to close 115 points lower at 35,432.39 on Thursday owing to losses in healthcare, capital goods, metal and auto stocks.
Weakening Rupee and continued capital outflows by foreign funds weighed on sentiment, brokers said.
However, rising above the negative trend, Reliance Industries continued its upward trajectory, spurting 1.09 per cent to a fresh closing high of Rs 1,031.10.
Most Asian and European markets traded lower over US-China trade war.
Meanwhile, RBI's June meeting minutes flagged inflation risks on the back of firm oil prices and volatility in global financial markets.
The 30-share Benchmark, which rose over 131 points in the morning trade and hit the session's high of 35,678.69, lost momentum and slumped to hit the day's low of 35,396.97. It finally ended 114.94 points, or 0.32 per cent lower at 35,432.39.
In the previous session, the Sensex had gained 260.59 points.
The broader NSE Nifty moved between 10,809.60 and 10,725.90, before finishing 30.95 points, or 0.29 per cent down at 10,741.10.
Meanwhile, according to provisional data, on a net basis, foreign portfolio investors (FPIs) sold shares worth Rs 1,442.61 crore, while domestic institutional investors (DIIs) bought equities worth Rs 1,473.65 crore on Wednesday.