Mumbai, Dec 1 (PTI) Benchmark stock indices Sensex and Nifty closed marginally lower after hitting their fresh all-time highs on Monday due to profit-taking at higher levels and foreign fund outflows.

The 30-share BSE Sensex pared early gains and closed 64.77 points or 0.08 per cent lower at 85,641.90. During the day, the benchmark jumped 452.35 points or 0.52 per cent to hit a record intra-day high of 86,159.02.

The 50-share NSE Nifty dipped 27.20 points or 0.10 per cent to settle at 26,175.75. During the day, it climbed 122.85 points or 0.46 per cent to hit a lifetime high of 26,325.80.

Markets faced correction at higher levels as expectations of an RBI rate cut this week faded following better-than-expected Q2 GDP growth, an expert said.

A slower growth in GST collection and profit-taking at higher levels also dragged the key indices.

Stock markets had surged to their record highs in the morning session as investor sentiment turned positive after India's economy grew at a higher-than-expected 8.2 per cent in July-September - recording the fastest pace in six quarters.

Among Sensex firms, Bajaj Finance, Sun Pharma, Trent, Mahindra & Mahindra, State Bank of India and Bajaj Finserv were the major laggards.

However, Tata Motors Passenger Vehicles, Maruti, Bharat Electronics, Kotak Mahindra Bank, Adani Ports and HCL Tech were among the gainers.

"After reaching a new high, the market moved into a range-bound phase as expectations of an RBI rate cut in December faded following better-than-expected Q2 GDP growth and a sharp depreciation of the rupee. Sentiment turned slightly cautious due to muted GST collections in November, driven by lower rates," Vinod Nair, Head of Research, Geojit Investments Limited, said.

"Markets surrendered early gains and pulled back sharply from record highs as profit-booking set in amid weak global cues and a cautious interest-rate outlook," Vikram Kasat, Head Advisory, PL Capital, said.

The BSE midcap gauge dipped 0.19 per cent and smallcap index ended flat marginally up by 0.05 per cent.

Among sectoral indices, realty dropped 1.02 per cent, followed by consumer durables (0.56 per cent), services (0.45 per cent), telecommunication (0.27 per cent), FMCG (0.23 per cent) and oil & gas (0.13 per cent).

Auto jumped 0.80 per cent, metal (0.56 per cent), BSE Focused IT (0.33 per cent), IT (0.28 per cent), and consumer discretionary (0.20 per cent).

India's manufacturing sector activity eased to a nine-month low in November, mainly owing to a softer rise in sales and production amid reports of challenging market conditions, a monthly report said on Monday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 56.6 in November from 59.2 in October, highlighting the slowest improvement in operating conditions since February.

Gross GST collection rose at a slower pace of 0.7 per cent in November at Rs 1.70 lakh crore, as domestic revenues declined, according to the government data released on Monday.

In Asian markets, Shanghai's SSE Composite index and Hong Kong's Hang Seng index settled in positive territory, while South Korea's Kospi and Japan's Nikkei 225 index ended lower.

Markets in Europe were trading lower. US markets ended higher on Friday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,795.72 crore on Friday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 4,148.48 crore, according to exchange data.

Brent crude, the global oil benchmark, jumped 1.96 per cent to USD 63.60 per barrel.

On Friday, the Sensex dipped by 13.71 points or 0.02 per cent to settle at 85,706.67. The Nifty skidded 12.60 points or 0.05 per cent to 26,202.95. PTI SUM MR MR

Stock markets retreated from lifetime highs amid profit-taking, FII outflows, and fading rate-cut expectations after stronger GDP. Benchmarks pulled back from record intraday highs as profit-taking and FII outflows offset earlier gains; fading expectations of a near-term rate cut after stronger Q2 GDP, a weaker rupee, and slower GST collections were cited as primary reasons, while sectoral divergence, muted mid/smallcap moves, and an easing manufacturing PMI added to the cautious market tone.