Weak global cues also weighed on the Indian market, analysts said. Globally, the markets were subdued after the US Federal Reserve raised its key interest rate by 0.25 per cent for the third time in 2018 bringing it to the 2-2.25 per cent range.
Although the Indian indices had opened on a positive note, they could not hold on to the gains for long.
Sector-wise, almost all the sectors, led by finance, banking and capital goods, came under selling pressure on Thursday. However, TECK (technology, entertainment and media) and IT stocks gained.
Index-wise, the Nifty50 on the National Stock Exchange closed at 10,977.55 points, lower 76.25 points or 0.69 per cent from its previous close.
The BSE Sensex, which had opened at 36,691.93 points, closed at 36,324.17 points, down 218.10 points or 0.60 per cent from its previous close of 36,542.27 points.
It touched an intra-day high of 36,711.62 points and a low of 36,238.23 points.
Major Asian markets closed on a mixed note, while European indices like DAX and CAC 40 traded in the red, Deepak Jasani, Head of Retail Research at HDFC Securities said.
On the currency front, the Indian rupee closed at 72.59 per US dollar, two paise stronger from its previous close of 72.61 per greenback. Rupee appreciated marginally as the government on Wesnesday raised import duties on various items in order to narrow down the current account deficit and arrest the fall of Indian currency.
Investment-wise, provisional data with the exchanges showed that foreign institutional investors bought stocks worth Rs 552.44 crore and domestic institutional investors sold stocks worth Rs 186.69 crore.
The top Sensex gainers were: Tata Consultancy Services, up 2.16 per cent at Rs 2,187.80; Coal India, up 1.39 per cent at Rs 276.30; Power Grid, up 0.93 per cent at Rs 194.80; Infosys, up 0.88 per cent at Rs 724.15; and HDFC Bank, up 0.54 per cent at Rs 1,977.95 per share.
On the other hand, major Sensex losers were: Yes Bank, down 9.14 per cent at Rs 203.20; Tata Motors (DVR), down 3.69 per cent at Rs 118.75; Maruti Suzuki, down 3.68 per cent at Rs 7,556.05; Tata Motors, down 3.32 per cent at Rs 225.55; and Axis Bank, down 2.79 per cent at Rs 598.70 per share.