The Sensex was down more than 60 points, while the Nifty shed 19 points in early trade. Investors were worried that the election results in Gujarat and Himachal Pradesh favoured the BJP, which would now push the Congress government at the centre for more populist measures.
Among the early gainers in trade were GAIL, Lupin, Asian Paints and Maruti Suzuki. Losers in early trade were Bharti Airtel, Hindalco, Reliance Infra and Reliance Industries.
Metal stocks that were gaining in the last few trading sessions took a breather with Sterlite Industries, Sesa Goa, Tata Steel and JSW Steel declining.
PSU banks which were also rising in the last few trading sessions witnessed a drop with Allahabad bank, IDBI Bank, Andhra Bank, Canara Bank, Bank of India being amongst the losers.
FMCG stocks were trading mixed with ITC losing marginal ground, while HUL gained marginally. IT stocks belied a weak trend with TCS and Infosys amongst the gainers in trade.
Among non index stocks Natco Pharma surged 2.35% after the company received US FDA approval for Lansoprazole launch.
Meanwhile, markets in Asia were trading sharply lower after fresh worries erupted over the fiscal cliff in the US.