The index, which rose over 167 points in previous four sessions, started the day on a positive note but failed to hold onto gains. Selling in IT, banking and metal weighed.
The BSE Sensex ended at 20,334.27, down 42.29 points or 0.21 per cent. Intra-day, it touched a high of 20,434.50 and a low of 20,312.21. Overall, 16 constituents of 30-share Sensex fell while 14 like RIL, L&T and ITC rose.
The 50-share National Stock Exchange index Nifty fell by 9.75 points, or 0.16 per cent, to end at 6,053.45 after moving between 6,083.05 and 6,046.40 during the day.
Traders said telecom stocks, including Bharti that shed 2.57 per cent, faced selling after fears of excessive competition came to the fore as the ongoing spectrum auction entered the 43rd round of bidding on seventh day today.
Among IT stocks, TCS fell 2.32 per cent but Infosys and Wipro bucked the trend.
Banking counters, including SBI, declined as the two-day nationwide strike by public sector bank staff began, traders added. Uneasiness over macroeconomic signals after advance growth estimates also kept the market volatile.
The falling trend was cushioned to some extent as realty and oil & gas sector shares rose on valued buying. Midcap and smallcap indices closed in the green, indicating some retail investor interest.
In buzzing large-cap stocks, DLF Ltd shot up by the most in two months by surging 2.94 per cent after announcing the sale of its luxury hospitality chain Amanresorts for USD 358 million. Sun Pharma climbed to a three-month high and Tata Motors gained ahead of its earnings.
Sectorally, the BSE Teck sector index suffered the most by losing 0.84 per cent, followed by Banking index (down 0.53 per cent), Metal index (0.51 per cent) and IT index (0.42 per cent). On the other hand, six out 12 indices gained.
* BSE index falls 0.21 pct; NSE ends 0.16 pct lower
* Idea marks biggest fall since Oct 2008
* Indian pharma companies gain on defensive buying
Indian shares fall; Idea posts biggest slump in over 5 yrs
(Reuters) India's benchmark BSE index fell on Monday, snapping a four-session winning streak, as wireless operators such as Idea Cellular slumped after rising prices in a mobile spectrum auction set off concerns about profit margins.
Blue chips were also hit after foreign investors sold a net $39.88 million worth of Indian shares in the secondary market on Friday, extending their selling streak to a seventh day that brought the total outflows to $582.02 million.
Still, gains in defensive sectors such as pharma prevented a sharper fall, as caution was also seen ahead of consumer price inflation and industrial output data due on Wednesday and wholesale inflation data on Friday.
India's CPI for January is seen at 9.3 percent versus mean estimates of 9.4 percent, Thomson Reuters smart estimates show.
Globally, shares made guarded gains, encouraged that Wall Street was able to weather a seemingly disappointing U.S. jobs report, although caution also prevails ahead of Federal Reserve Chairwoman Janet Yellen's first testimony to the U.S. House of Representatives on Tuesday.
"Shares may continue to remain rangebound. Inflation data may lead to a breakout or breakdown before the elections," said G Chokkalingam, founder of research and fund advisory company Equinomics.
The benchmark BSE index fell 0.21 percent, or 42.29 points, to 20,334.27, after ending on Friday at its highest in one week. The broader NSE index dropped 0.16 percent, or 9.75 points, to 6,053.45.
Shares of telecom companies slumped as rising prices in the spectrum auction are seen reducing potential profit margins.
Idea Cellular Ltd slumped 8.44 percent, its biggest single-day fall since Oct. 23, 2008. Bharti Airtel Ltd fell 2.7 percent, while Reliance Communications Ltd lost 4.2 percent.
Among blue chips, Housing Development Finance Corp fell 2.3 percent, while Tata Consultancy Services ended lower 2.4 percent on continued risk aversion.
Banks were also under pressure with HDFC Bank lower 0.6 percent and State Bank of India down 0.9 percent.
However, pharmaceutical companies perceived as defensive gained on risk aversion.
Sun Pharmaceutical Industries Ltd gained 1.7 percent and Dr.Reddy's Laboratories Ltd rose 1.5 percent.
DLF Ltd rose 2.9 percent after the company said it completed the sale of its Amanresorts luxury hotel chain back to original Indonesian owner Adrian Zecha for an enterprise value of around $358 million.
FACTORS TO WATCH
* Eyes on Fed's Yellen after poor jobs print for dollar
* Oil slips below $109 after touching five-week high
* Asia shares mostly higher, plenty of risk ahead
* Foreign institutional investor flows