Besides, rising crude oil prices in global markets on escalating tensions in Iraq further dampened hopes of a rate cut by the RBI as WPI inflation in May rose to five-month highs.
Wholesale price index (WPI) based inflation climbed to 6.01 percent in May, up from 5.20 percent a month ago.
Profit-booking and selling pressure on below-normal monsoon forecast, marred sentiments, traders said.
In choppy movements, the 30-share BSE barometer resumed 34 points lower in line with weakness in Asian stocks. It declined further to a low of 25,063.93, down over 160 points at one stage, but rebounded to 25,268.41.
The slight recovery was on the back of rise in select stocks. It closed at 25,190.48, down 37.69 points, or 0.15 percent. The index had lost 348.04 points on Friday. Today's Sensex close is lowest since 25,019.51 on June 5.
The NSE 50-issue CNX Nifty also ended 8.55 points, or 0.11 percent, down at 7,533.55 after shuttling between 7,487.55 and 7,548.60 intra-day.
Meanwhile, crude oil climbed to nine-month high, with West Texas Intermediate trading higher at USD 107.26 a barrel for delivery in July in Asian trade, as the escalation of violence in Iraq stoked concern that supplies will be hit.
Foreign Portfolio Iinvestors bought shares worth a net Rs 1,099.92 crore last Friday, as per the provisional data.
Prominent Sensex losers were Larsen and Toubro 2.08 percent, Reliance Industries 1.61 percent, ICICI Bank 0.97 percent, Axis Bank 2.92 percent and SBI 1.04 percent. Dr Reddy's Lab, HDFC, Mahindra and Mahindra, Maruti Suzuki, NTPC, Tata Motors and Tata Steel also dipped.
On the other hand, IT stocks caught buyers' fancy after the rupee dipped below the 60 mark against the dollar.
Bucking the overall negative trend, IT index gained 1.54 percent with all the three top IT stocks TCS, Infosys and Wipro ending higher.
Sectorwise, the BSE capital goods suffered the most by losing 1.16 percent, followed by auto index 1.07 percent and banking index 0.52 percent.


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