The Sensex was trading lower by 180 points, while the Nifty lost 55 points in trade. Among the top losers in trade were the banking stocks. ICICI Bank was the top loser from the Nifty dropping more then 2.5 per cent, while other losers were Axis Bank, Bharti Airtel and DLF.
Heavyweights, ITC and Reliance also fell pushing indices lower. Infosys on the other hand gained ahead of its results to be declared later this week.
Other IT stocks like Tata Consultancy Services and HCL Tech were also trading strong along with Infosys.
PSU banking stocks along with the private sector counterparts also fell sharply in trade. Among the notable losers were Bank of Baroda, Union Bank of India, Oriental Bank of Commerce and Syndicate Bank.
Cement stocks were also not having a good day in trade with Ultratech Cement, ACC and Ambuja Cements among the early losers.
Sobha Developer was up for the second day in a row after reports that the company sold 1 million square feet of new spaces in July-September quarter.
Jet Airways dropped 2.4 per cent in trade despite reports of receiving clearance from the cabinet committee for economic for its deal with Etihad.
Apart from the IT stocks, shares that gained from the Nifty were Ranbaxy, Sesa Sterlite, Lupin and Tata Steel.
Meanwhile, markets in Asia were trading marginally lower ahead of the US debt ceiling talks. The Japanese Nikkei, the Hong Kong's Hang Sang and the Taiwan Weighted were all trading lower.