Market developed cold feet as the Sensex failed to stick with its two-day winning momentum and dropped over 274 points to end at 27,035.
The S&P BSE Sensex extended its gains for the third straight day, suring by another 107 pts to finish at 2-month high at 27,247.16.
Benchmark Sensex surged nearly 241 points to close at a two-month high of 27,140 and Nifty reclaimed the 8,300-level.
The benchmark Sensex remained range-bound in choppy trade, ending about 33 points down as investors preferred to stay light ahead of earnings season.
Marked by day-long swings, the stock market came off its nearly two-month high by falling over 119 points to close at 26,759.
Reversing its previous day's losses, the Sensex today staged a comeback to end with a paltry gain of 48 points at 26,643.
Stocks signed off 2016 on a cheerful note, with Sensex surging over 260 points to close at over a fresh two-week high on the final trading session of the year.
The market notched up its biggest single-session rally in about three weeks to end above the 26,000-mark.
The Sensex showed its unpredictable side again as it reversed two days of gains and dived about 232 points to close at 26,515.
The benchmark Sensex scored its best weekly number in four months by gaining 517 points to finish at 26,747.