The BSE Sensex closed lower for the eighth day in a row equaling a similar losing streak in November 2011. The broader Nifty closed below the key 5,900 mark after earlier hitting its lowest level of 5,879 in 2013.
The BSE Sensex declined 24 points or 0.12 per cent to 19,461, while the broader Nifty ended 6 points lower at 5,898. The rupee also traded lower against the dollar at 53.70 as of 3.40 p.m.
Markets opened in the green today, but the gains were short-lived. With the Lunar New Year holiday shutting most Asian financial centres, including those in Japan, China, Hong Kong, Singapore and South Korea, trading was light and volatile on those exchanges that remained open.
However, most market analysts said the recent correction was overdone and a bounce back was around the corner.
"Whenever markets correct, stocks are available at comfortable valuations. This is a good time to add quality stocks and hold them for 3-6 months," Deven Choksey said.
Realty, banking, healthcare and PSU stocks were among the gainers while capital goods, IT and FMCG stocks saw selling pressure. On the Nifty, 29 of the 50 stocks closed in the red.
Cement maker ACC and infra lender IDFC extended losses on weak Q3. The two stocks ended 3.7 and 2.4 per cent lower respectively. Bharti Airtel shares fell 1.7 per cent on concerns that the company may be asked to pay Rs 650 crore in penalties for licence violation between 2000 and 2005.
Oil and Natural Gas Corp fell 1.7 percent ahead of its December quarter earnings later in the day, while ITC declined 0.9 per cent on profit-taking.
Drug maker Cipla recovered from a selloff last week to top the list of Nifty gainers. The stock gained 3.8 per cent. Private lender Axis Bank closed with 3 per cent gains, while aluminium maker Hindalco advanced 2.4 per cent.