The broader Nifty too put up a strong show by notching up gains of close to 1 percent.
The Sensex had touched an alltime high of 33865.95 on November 7 and Nifty had hit a record high of 10490.45 on November 6.
"On the macro front upcoming RBI policy and Gujarat state election will be an influential factor for investors which is steering the market to consolidate", said Vinod Nair, Head of Research, Geojit Financial Services.
However, value-buying in several heavyweights towards the fag-end trimmed the losses, with the index finishing at 32,802.44, down 67.28 points or 0.20%.
Biggest gainers in the 30-share index were Bharti Airtel (2.34%), Tata Motors (1.90%), Maruti Suzuki India (1.61%) and Wipro (1.56%).More news: Herm Edwards to be introduced as Arizona State coach Monday
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Domestic institutional investors were net buyers as they bought shares worth Rs926.68 crore on Thursday, while foreign portfolio investors offloaded equities amounting to Rs1,075.62 crore, provisional data showed.
On the other hand, Coal India (0.49%), and Dr Reddy'S Laboratories (0.09%) were the major losers in the Sensex.
All the sectoral indices on the National Stock Exchange (NSE) traded in the green with the auto, media, metals and PSU banking indices gaining over 1%, during the day. The BSE FMCG index topped with a robust 2.23 percent rise, followed by metal 1.36 percent, healthcare 1.35 percent, consumer durables 1.15 percent, oil & gas 1.02 percent, auto 0.97 percent, bankex 0.92 percent and realty 0.72 percent.
Overseas, the Asian markets saw the shares of most of the companies decline, since investors across the globe have an eye on the final tax legislation in the U.S., where policy uncertainty kept sentiment in check.
Asian markets retreated, with Japan's Nikkei falling 0.37%, Hong Kong's Hang Seng declining 1.01% and Shanghai Composite Index finishing 0.18% lower. London's FTSE rose 0.16% in late morning deals.