Losses in counters like Oil & Natural Gas Corp (ONGC), GAIL, RIL, SBI, Axis Bank, Mahindra and Mahindra, Maruti Suzuki, ITC and Larsen & Toubro mainly weighed on the market sentiment.
Bucking the general weak trend, pharma sector stocks such as Dr Reddys Lab, Ranbaxy Cipla and Sun Pharma ended higher -- providing investors some relief.
The BSE Sensex ended down 106.38 points, or 0.40 per cent, to end at 26,314.29 after surging to 26,504.52 intra- day. Yesterday, the 30-share benchmark had ended at its all-time closing high of 26,420.67 and had also logged intra-day life high of 26,530.67. In previous six days of straight gains, it had gained over 1,091 points.
The NSE Nifty in early trade hit a new high of 7,922.70 but slipped below the 7,900-mark to close at 7,875.30, down 22.20 points or 0.28 per cent. Its earlier all-time closing high was 7,897.50. Yesterday, it had touched intra-day record high of 7,918.55. In previous six days, it rose 329 points.
"Investors booked profits after the recent surge which saw them reach record high levels. Buying interest was seen in IT and pharma stocks on account of a weak rupee against the dollar," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
Sectorwise, the BSE Oil and gas index suffered the most by falling 1.32 per cent, followed by FMCG Index 0.70 per cent and Auto Index 0.56 per cent.
However, Healthcare index ended 2.93 per cent higher, Power index 0.73 per cent, Realty index 0.52 per cent and IT index 0.23 per cent.
Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 559.39 crore yesterday, as per provisional data from the stock exchanges.
In Asia, most indices edged higher following a positive lead from Wall Street, where stocks picked up on encouraging US data before a keynote speech this week by Fed chief.
However, Europe's main stock markets dipped at the start of trading on Wednesday after two days of strong gains. London's benchmark FTSE 100 index fell 0.12 per cent and Frankfurt's DAX 30 edged down 0.05 per cent. The CAC 40 index in Paris also lost 0.10 per cent.
* BSE index falls 0.4 pct; NSE ends 0.28 pct lower
* Pharma shares buck trend, lead gainers
* Heavy foreign buying in options points to big move
India's NSE index retreats from record high on profit-taking
(Reuters) India's NSE index edged lower on Wednesday, unable to sustain a rally after hitting a third consecutive record high earlier in session as investors took profits in blue-chips such as Oil and Natural Gas Corp .
The falls ended a six-day rally, the longest winning streak since an eight-session run in mid-July.
Falls also tracked lower global stocks ahead of minutes from the U.S. Federal Reserve's July policy meeting and the Jackson Hole gathering of central bankers later in the week. A rebound in Brent crude oil from 14-month lows also led to paring of some positions.
Still, broader losses were capped as overseas investors continued to be active buyers, especially in derivatives. Foreign funds added 41.22 billion rupees ($677.4 million) in exposure to Indian equity derivatives on Tuesday, exchange data showed.
"Indian shares are still good buys given the economic recovery, government's reform talk and the central bank's focus on increasing resilience against an expected rise in U.S. rates," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm.
The broader NSE index lost 0.28 percent, or 22.20 points, to end at 7,875.30, after earlier rising as much as 0.32 percent to hit an all-time high of 7,922.70.
The benchmark BSE index fell 0.4 percent, or 106.38 points, to end at 26,314.29 after marking its record high of 26,530.67 on Tuesday.
Among blue-chips succumbing to profit-taking, ONGC fell 2.6 percent, while Tata Motors ended lower 1.3 percent.
ITC Ltd and Reliance Industries Ltd both ended down 1.1 percent.
Oil marketing companies fell after Brent crude oil rebounded from 14-month lows.
Bharat Petroleum Corp lost 1.1 percent, Hindustan Petroleum Corp was lower 0.8 percent, while Indian Oil Corp ended down 0.9 percent.
Indian drugmakers bucked the market trend as investors sought defensives.
Ranbaxy Laboratories rose 4.6 percent, while Sun Pharmaceutical Industries ended higher 4.6 percent after earlier marking an all-time high of 849.80 rupees.
Dr. Reddy's Laboratories gained 2 percent after a filing with the U.S. Securities and Exchange Commission on Monday showed key drugs gaining market share in the U.S. market, analysts said.
Just Dial gained 2.4 percent on its proposal to raise the foreign investment limit.
FACTORS TO WATCH
* Dollar breaks out to 11-month highs, eyes on Fed
* Brent crude oil rebounds off 14-month low towards $102
* Stocks halt rally, BoE jolts UK markets
* Foreign institutional investor flows