In early trade, the 30-share index rose to a day's high of 28,115.96 points on the back of a stronger global market on hopes of a Greece deal and buying by foreign investors.
However, on across-the-board selling towards the close, the Sensex slipped into negative zone and closed the session 75.07 points or 0.27 per cent down at 27,945.80, slipping from its two-and-a-half months high.
The gauge had gained 376 points in previous two sessions. The 50-issue NSE Nifty fell by 8.15 points or 0.10 per cent to 8,444.90. It shuttled between 8,479.25 and 8,433.20 during the session.
Tata Motors fell the most among Sensex stocks by dropping 1.84 per cent despite the firm reported a 6 per cent increase in total sales in June, followed by Hindalco at 1.72 per cent.
Other major losers on the index included Cipla, ONGC, Vedanta, Maruti Suzuki, GAIL, HDFC Bank, Dr Reddy's, Infosys, HDFC, NTPC, Lupin, L&T, Tata Steel, TCS and Sun Pharma.
However, shares of M&M, Bharti Airtel, Bajaj Auto, Hero MotoCorp, Axis Bank, Wipro, HUL, ITC and RIL ended in positive zone and cushioned the fall.
Stocks of software exporters faced selling after revenue warnings by some IT companies and Eurozone worries led to concern about June-quarter earnings.

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