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The benchmark indices, the BSE Sensex and the NSE Nifty, dropped lower in early trading on Monday.
At 9:45 am, Sensex was down 105 points or 0.18 per cent lower at 58,908. Nifty slipped 45 points or 0.26 per cent to 17,539.
The top gainers in the Sensex were Hindustan Unilever, HCL Tech, Tech Mahindra, ITC and L&T. The laggards were Tata Steel HDFC, Bajaj Auto, Power Grid and SBI.
According to an agency report, Sensex slumped over 350 points in opening trade on Monday, tracking losses in index majors Tata Steel, HDFC twins and ICICI Bank amid thin trade in global markets.
In the previous session, the 30-share index settled 125.27 points or 0.21 per cent lower at 59,015.89, and Nifty slipped 44.35 points or 0.25 per cent to close at 17,585.15.
Foreign institutional investors (FIIs) were net buyers in the capital market as they purchased shares worth Rs 1,552.59 crore on Friday, as per provisional exchange data.
According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, markets are likely to turn volatile from now on.
"Possible tapering timeline from the Fed this week, rising bond yields in the US, strengthening dollar (dollar index above 93) and news of the crisis in the large Chinese real estate developer Evergrande are likely to weigh on markets," he said.
With valuations in stretched territory, corrections are possible, particularly in the broader market. On the positive side, FIIs continue to buy, imparting resilience to the markets. But this can quickly change. Investors may adopt a wait-and-watch strategy till clarity emerges, he added.
Elsewhere in Asia, Hang Seng was trading with steep losses. Bourses in China, Japan and Tokyo remained closed.
Meanwhile, international oil benchmark Brent crude slipped 0.66 per cent to $ 74.84 per barrel. (with inputs from PTI)
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