The Sensex was last trading at 20128.24 points, down 83 points, while the Nifty was down 24 points at 5976 points.
Stocks like HCL Tech, NTPC and Tata Motors were lower in trade. Heavyweight, ITC was down more than 1 per cent, which added to pressure on the Nifty and the Sensex.
Other stocks that declined in trade were Hindalco, HDFC and ONGC.
Banking stocks, however, bucked the trend and were higher after being battered for most of last week, following the RBI's Monetary policy.
Gainers from the space included Yes Bank, Union Bank of India and IndusInd Bank. Telecom stocks which were in the limelight following the successful 2G telecom auction on Tuesday, gave up gains and were trading with losses.
Lupin which rallied on Tuesday, following a good set of numbers was trading lower. Ranbaxy was trading 1 per cent higher ahead of its numbers to be declared later today.
Nifty gainers in early trade included Infosys, Larsen and Toubro and Mahindra and Mahindra. The Mid Cap index was trading with gains, with companies like Voltas and Siemens gaining. However, stocks like Unitech and IGL were trading lower from the mid cap space.
Meanwhile, most of the Asian markets were trading higher, except the Shanghai Composite and the Taiwan Weighted which were trading with losses. The Nikkei recovered from Tuesday's dramatic fall and was 1 per cent higher.