The 30-share index had climbed to all time high of 22,853.03 points in early trade on select buying in bluechips.
However, the barometer pared gains later in the day due to profit booking and ended with marginal loss of 6.46 points, or 0.03 per cent, at 22,758.37 points.
The broad-based Nifty of the National Stock Exchange also climbed to record level of 6,838, before ending at 6,815.35, down by 2.30 points, or 0.03 per cent.
"Despite some profit booking, the index maintained positive bias and stock specific buying kept the index above 6800 level on closing basis too," Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
IT, metal and auto stocks witnessed profit booking after a recent rally pulling the indices back from record levels, brokers said.
Investors were also offloading their positions as the monthly settlement preponed to Wednesday, they added. Market will be closed on Thursday for Lok Sabha elections in Mumbai.
"In coming sessions, 6830 shall be crucial deciding level in near term, and index is likely to witness further buying above this level," Goyal said.
Among major losers, Sesa Sterlite fell by 4.01 per cent, Wipro by 2.80 per cent, while Infosys, SBI and Tata Motors fell up to 1 per cent.
However, gains in Reliance Industries, Larsen & Toubro and HDFC Bank cushioned the market from a major fall. Larsen & Toubro gained 1.65 per cent, HDFC Bank by 1.36 per cent and RIL by almost 1 per cent. HDFC Bank rose after it posted 23 per cent jump in Q4 net profit.
In 30-BSE index components, 18 stocks declined.
Bajaj Auto, ITC, Mahindra and Mahindra, Maruti Suzuki and Tata Steel were also among major losers.
The metal sector index suffered the most by losing 0.79 per cent to 10,412.29 followed by IT index by 0.55 per cent to 8,798.05. Teck index lost 0.52 per cent to 4,916 and FMCG index by 0.46 per cent to 6,949.55.
($1 = 60.4750 Indian Rupees)
BSE Sensex ends flat after hitting record highs
(Reuters) Indian shares ended flat on Tuesday after hitting record highs for a second consecutive session as momentum waned ahead of the expiry of monthly derivative contracts and on expectations that current levels sufficiently price in fundamentals.
Investors booked profits in recent outperformers such as State Bank of India and Tata Motors, although gains in other sectors such as capital goods helped offset those losses.
Although overseas investors have underpinned sentiment, the pace of buying has slowed. Foreign institutional investors bought shares worth 2.13 billion rupees ($35.22 million) on Monday, having bought $67.58 million worth on Thursday.
Analysts warn markets could be headed for a period of range-bound trading. Derivative contracts will expire on Wednesday while markets will remain closed on Thursday as Mumbai heads to the polls in the on-going general elections.
"There will be muted upside for the time being," said Deven Choksey, managing director, KR Choksey Securities.
"You may see action in individual stocks, which will find intermediate upmoves on rotation," he added.
The benchmark BSE index closed 0.03 percent lower at 22,758.37, after gaining as much as 0.39 percent to hit an all-time high of 22,853.03 earlier in the day.
The broader NSE index ended 0.03 percent down at 6,815.35, having earlier advanced as much as 0.3 percent to hit a record high of 6,838.
Recent outperformers were hit by profit-taking. State Bank of India fell 1.14 percent after having gained 36 percent since the end of January to Monday's close on expectations the central bank would keep interest rates on hold.
Interest-rate sensitive auto makers also fell. Maruti Suzuki fell 0.64 percent after gaining 25 percent since the end of February until Monday's close.
However, capital goods stocks extended recent gains as dealers cited good buying by foreign investors.
Larsen and Toubro Ltd ended 1.8 percent higher, adding to its 4.2 percent gain on Monday, while Bharat Heavy Electricals Ltd rose 0.24 percent.
Oil and gas stocks were among other gainers on the back of value buying, with heavyweights such as Reliance Industries closing up 0.85 percent and Oil and Natural Gas Corp. ending 1.01 percent higher.
Among the laggards, Wipro Ltd lost 2.87 percent, adding to its 6.8 percent fall of Monday as the stock continued to remain under pressure after a weak IT services outlook.