Benchmark indices opened the day lower as hopes of a rate cut were dashed after inflation came in higher than expected.
Banking stocks fell on the inflation data with ICICI Bank and Axis Bank among the early losers. HDFC, Tata Motors and Zee were the stocks that added early pressure on the Nifty.
IT stocks were also the laggards in trade with TCS, Infosys, HCL Tech and Wipro among the early losers.
Shares in IndusInd Bank rallied following a good set of results. A host of brokerages have upgraded the stock to a buy.
SUN TV also saw good buying interest on hopes the company's license would be approved by the government. News reports suggested that the license issue maybe taken up today.
Shares in Dr Reddy's Laboratories was trading higher after the company launched memantine hydrochloride tablets in the US markets.
Meanwhile, markets across Asia were trading higher led by gains in the Japanese Nikkei and the Taiwan Weighted.