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The 30-share BSE index was trading 140.79 points or 0.28 per cent lower at 50,114.96.
Similarly, the broader NSE Nifty slipped 31.30 points or 0.21 per cent to 14,758.65.
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IndusInd Bank was the top gainer in the Sensex pack, rising around 4.50 per cent, followed by Dr Reddy's, PowerGrid, Tech Mahindra, M&M, Sun Pharma and Axis Bank.
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Analysts said that traders remained cautious ahead of Reserve Bank of India (RBI) monetary policy outcome to be announced on Friday.
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The Sensex ended 1,197.11 points or 2.46 per cent higher at 49,797.72. The BSE gauge topped the 50,000-level briefly and swung 1,554 points during the day.
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At the interbank forex market, the domestic unit opened at 72.89 against the US dollar, then inched higher to 72.88, registering a rise of 8 paise over its previous close.
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The 30-share Sensex was trading 929.54 points or 2.01 per cent higher at 47,215.31; and the broader Nifty surged 260.05 points or 1.91 per cent at 13,894.65.
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The Code will include SEBI Act, Govt Securities Act and Depositories Act. All these Acts will be amended for the Code.
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On the Sensex chart, IndusInd Bank, ICICI Bank, HDFC, ONGC, Titan and HDFC Bank were prominent gainers.
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According to FPI statistics available with depositories, overseas investors pumped in a net of Rs 19,473 crore into equities but pulled out Rs 4,824 crore from the debt segment between January 1 and January 29.
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On the Sensex chart, IndusInd Bank, Mahindra and Mahindra, L&T, ONGC, Bajaj Finance, HDFC Bank and Bajaj Auto were prominent gainers.
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The 30-share BSE index ended 535.57 points or 1.13 per cent lower at 46,874.36.
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HDFC Bank was the top loser in the Sensex pack, shedding around 2.50 per cent, followed by HDFC, HCL Tech, Tech Mahindra, Sun Pharma, PowerGrid, Kotak Bank, SBI, and Nestle India.
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The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.08 per cent to 90.23.
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Around 10.25 a.m., Sensex was at 47,954.05, lower by 393.54 points or 0.81 per cent from its previous close of 48,347.59.
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The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 90.12.
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Among major earnings to focus on this week are from UCO Bank, Axis Bank, Bank of Baroda, Canara Bank, Hindustan Unilever Limited, Lupin, Maruti Suzuki India and Tata Motors.
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The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.03 per cent to 90.10.
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Bajaj Auto, Asian Paints, Mahindra and Mahindra, Maruti Suzuki and Reliance Industries were top gainers.
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On the domestic equity market front, the BSE Sensex was trading 277.80 points or 0.56 per cent higher at 50,069.92.
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Bajaj Fiserv was the top gainer in the Sensex pack, rising around 4 per cent, followed by Bajaj Finance, Reliance Industries, IndusInd Bank and Axis Bank.