Analysts remain cautious on stock markets as they think government's move to demonetise big currency notes of Rs. 500 and 1,000 will impact sales of many consumption driven companies hence lowering their earnings growth.
The Nifty, after shuttling between 8,151.25 and 8,060.30, concluded 31.65 points or 0.39 per cent down at 8,079.95, a level last seen on May 26, 2016, when it closed at 8,069.65. It then climbed by 151 points to day's high of 26,449.87, only to pare the gains in noon trade by 143 points to hit day's low of 26,155.40, before closing at 26,227.62, down by 71.07 points compared with its last close.
The BSE market breadth was skewed in favour of the bears - with 1,653 declines and 965 advances.
At the National Stock Exchange (NSE), the broader 51-scrip Nifty, which had closed at 8,111.60 points, was trading at 8,105.10 points, down by 6.50 points or 0.08 per cent.
The sensex opened at 26,304.90 points on Thursday.
"Investors were jittery ahead of the US Fed's Janet Yellen's speech later in the evening", Jain said.
In overseas, most Asian stocks ended higher tracking overnight gains in USA markets.
Besides, global sentiments continued to remain subdued on worries over trade restrictions with the US as a result of the surprise victory of Republican Donald Trump in the November 8 US Presidential election prevailed in the global markets. The index rose 39.65 points or 0.48% at the day's high of 8,151.25 in early trade.
Shares of telecom, teck, IT, finance and banking sectors moved down due to selling pressure, while utilities, power, metal, refinery and healthcare firmed up on good buying.
Major losers included ITC (2.94 per cent), Dr Reddy's (2.89 per cent), Cipla (2.55 per cent), Lupin (2.27 per cent) and Sun Pharma (2.13 per cent).
Overseas investors pulled out a net $324 million from Indian shares last week through Thursday, and foreign holdings of bonds dropped by Rs 14,200 crore on Friday, the most since October 13. China's Shanghai Composite index gained 0.03 per cent. Tata Consultancy Services was the top gainer with a 4% rise in its stock price, with Asian Paints, ONGC and Zee Entertainment also performing well, according to NDTV.
South Korea's Kospi was also trading in red, down by 0.11 per cent.