The benchmark BSE Sensex retreated from record high levels to close down by about 12 points due to profit booking in recent gainers, mainly capital goods, metal, auto and banking stocks.
The wider NSE Nifty managed to close at new high of 8,914.30 points amid a mixed trend in global markets.
In the day trade, both Sensex and Nifty hit all time high levels of 29,786.32 and 8,985.05 points respectively.
However, the indices pared gains later due to profit booking at record levels, brokers said.
The BSE 30-share barometer dropped to a low of 29,417.67 points in late afternoon deals on across-the-board profit booking. The index finally settled at 29,559.18 points, down by 11.86 points, or 0.04 per cent over last close.
The gauge had rallied 2,224.22 points, or over 8 per cent in the previous eight straight sessions on sustained foreign fund inflows, triggered by positive macroeconomic data and a surprise rate cut by the Reserve Bank.
The CNX Nifty in highly volatile movements, gained 3.80 points, or 0.04 per cent to close at a new record high of 8,914.30, bettering its previous record closing of 8,910.50 yesterday. It shuttled between 8,874.05 and 8,985.05 during the day.
Traders adopted a cautious stance ahead of the monthly expiry in the derivatives segment tomorrow and were seen trimming their positions at record levels, brokers said.
Weakness in some of the heavyweight counters like Bharti Airtel, Sesa Sterlite, L&T, Tata Motors, BHEL, Tata Steel, Tata Power, Hindalco and Sun Pharma dragged the benchmark Sensex down from record highs.
However, gains in HDFC, RIL, SBI, Maruti Suzuki, ITC, TCS and ONGC cushioned the fall.
Overall market breadth, however, remained positive on persistent buying by retail investors in second-tier stocks.
Foreign portfolio investors bought shares worth a net Rs 953.50 crore yesterday, provisional data showed.
Most Asian markets ended higher while European markets were lower in their opening trade.