Consequently, the key indices traded in the red during the mid-afternoon session, as heavy selling pressure was witnessed in banking, capital goods and automobile stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 36.10 points or 0.42 per cent to 8,529.75 points.
Similarly, the 30-scrip sensitive index (Sensex) of the BSE traded lower. The barometer index which opened at 27,980.07 points, traded at 27,772.63 points (at 2.30 p.m.)-- down 43.26 points or 0.51 per cent from the previous close at 27,915.89 points.
It has touched a high of 27,988.76 points and a low of 27,739.07 points so far during the intra-day trade.
The BSE market breadth was tilted in favour of the bears -- with 1,425 declines and 1,147 advances.
On Wednesday, the benchmark indices ended in the green, prompted by value buying and healthy inflow of foreign funds. The barometer index closed higher by 128.27 points or 0.46 per cent, while the Nifty edged up by 37.30 points or 0.44 per cent.
Initially on Thursday, the benchmark indices opened on a positive note, in sync with their Asian peers, especially the Japanese markets.
Besides, the equity markets were pushed up by higher global crude oil prices, firm rupee, healthy progress of monsoon season and recovery in the European indices.
However, the equity markets soon ceded their gains on the back of sector-specific profit booking.
In addition, reduced chances of further monetary policy easing by the European Central Bank (ECB) in its upcoming monetary policy review dampened investors' sentiments.
Further, the ongoing logjam in parliament hampered the upward trajectory.
"Investors have been hesitant in chasing prices higher due to major event risks that are lined up like the ECB's upcoming monetary policy meet," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
Dhruv Desai, Director and Chief Operating Officer of Tradebulls, pointed out that Nifty and Bank Nifty traded with bearish sentiments on profit booking.
"Most IT and banking sector stocks traded with bearish sentiments on profit booking, while pharma and auto stocks also faced resistance at higher levels due to profit booking," Desai noted.
According to Nitasha Shankar, Senior Vice President for Research with YES Securities, broader markets outperformed the headline indices.
"Midcap and smallcap indices continued to outperform the headline indices. Both the indices traded in the green," Shankar said.
"Barring the media, auto and realty, all major sectoral indices traded in the red."
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