The Indian domestic markets ended down on Thursday.
The 30-share barometer finished 83.77 points or 0.31 per cent at 26,519.07. Similarly, the Nifty lost 28.85 points or 0.35 per cent at 8,153.60.
The Sensex see-sawed 330 points as it hit a high of 26,737.86 and a low of 26,407.58 in intra-day trade.
The 30-stock gauge had lost about 95 points in the previous session.
Top 5 gainers on Sensex : TCS (+2.3%), Axis Bank (2.1%), ONGC (+1.3%), PowerGrid (+1.1%) and Bajaj Auto (0.95%).
Sun Pharma (-4.3%), NTPC (-2.2%), Tata Motors (-1.9%), ITC (-1.4%), and Bharti Airtel (-1.2%) were among the major losers.
European markets
European shares rose on Thursday, helped by gains in global banks following the US Federal Reserve's interest rate hike overnight, while growing corporate deal activity continued to underpin year-end optimism.
The pan-European STOXX 600 was trading up 0.2 percent, inching back towards an 11-month high scaled earlier this week. The benchmark index is still down nearly 3 percent so far in 2016, but could close the year in positive territory if the market witnesses an end-of-year rally.
The European banking index was up 1.5 percent, boosted by a 2.1 to 4 percent rise in lenders such as Deutsche Bank, BNP Paribas, Societe Generale and Barclays following the Fed's move.
Shorter-dated US Treasury yields surged on Wednesday, with those on two-year notes climbing to their highest in more than seven years after the Federal Reserve raised interest rates for the first time in a year and flagged more rate increases in 2017.
Higher yields are a boon to banks' profitability.
“We think that the Fed will continue to be very gradual in its rate hikes and we look for maybe two to three rate hikes in 2017, depending on how growth comes out next year,” said Bob Baur, chief global economist at Principal Global Investors.
“We expect to see higher stock prices, faster nominal growth, mildly higher interest rates and just a bit more inflation.”
Asian markets
Hong Kong stocks slumped to a four-month low, tracking Asian markets, after the U.S. Federal Reserve raised interest rates and rate-path projections.
The benchmark Hang Seng index extended early losses to end down 1.8 percent, at 22,059.40 points. The Hong Kong China Enterprises Index lost 2.3 percent, to 9,479.16 points.
Japan's Nikkei rose fractionally on Thursday in choppy trade as the dollar surged against the yen after the U.S. Federal Reserve raised rates for the first time in a year and hinted further hikes could come at a faster pace than the market had expected.
The Nikkei share average rose 0.1 percent to 19,273.79 after dipping into negative territory.
The Topix rose 0.3 percent to 1,542.72 after turning positive on the year earlier.