The Sensex was trading lower by 85 points, while the Nifty lost 27 points in early trade. Bharti Airtel was among the top gainers after the company said Qatar Foundation will pick a 5 per cent stake in the company at Rs 340 per share. The stock was up 2.4 per cent at Rs 325 per share.
Banking stocks saw some selling pressure ahead of the RBI policy due later today. ICICI Bank lost 1.25 per cent in early trade, while State Bank of India was down 0.75 per cent and HDFC Bank lost 0.5 per cent.
PSU banking stocks that lost ground in trade were Indian Overseas Bank, Canara Bank, Union Bank of India, Andhra Bank and Bank of Baroda and IDBI Bank.
Among the early losers in trade from the Nifty stocks were IDFC, BPCL, Reliance Infra, Tata Motors, Mahindra and Mahindra, Jaiprakash Associates and Hero Motor Corp.
Among the top gainers apart from Bharti Airtel were HCL Tech, Ambuja Cements, ACC, Lupin, and Grasim.
IT stocks continued to find buyers at lower levels with Infosys among the gainers along with Tata Consultancy Services.
Real estate stocks took a breather after the rally of the last few days. Real estate stocks that declined in trade were Indiabulls, HDIL and Anant Raj.
The mid cap index lost almost 1 per cent in trade with Voltas, Unitech and Vijaya Bank among the prominent losers.
Meanwhile, markets in Asia were trading mixed with the Chinese Shanghai Composite rallying 1.61 per cent, while the Hong Kong's Hang Sang and the Japanese Nikkei lost ground.