Yesterday, Sensex had snapped a three-day falling trend as it recovered by about 34.09 points or 0.12 per cent.

"Weak Asian markets and fresh fears from Euro region kept Indian markets volatile. Mixed sentiments on the back of weak rupee and lower oil too added to the volatility. FII liquidity outflow on the back of profit booking too added to weakness,"

said Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio. Investors were also cautious ahead of the release of Consumer Price Index-based inflation and Index of Industrial Production scheduled on Friday.

A total 11 out of 12 BSE sectoral barometers ended in the red. Market breadth was weak as about 1,750 stocks fell, 1,139 rose and about 100 ended flat.

Bucking the overall weak trend, sugar stocks were in limelight after government fixed higher price for ethanol procurement by PSU oil firms.

Asian bourses closed weak after Wall Street finished sharply lower overnight on the back of further oil price declines, while a worse-than-expected machinery orders report from Japan pushed the market lower.

Key indices in China, Hong Kong, Japan, Singapore and South Korea and Taiwan finished lower between 0.21 per cent and 1.49 per cent.