The Sensex was trading at 17,561 points, lower by 56 points. The Nifty was seen trading lower by 15 points at 5,330 points at 9.40 am IST.
In Asia, Japan's Nikkei 225 slipped 0.48%, China's Shanghai Composite was down by 0.22%, while the Hang Seng index was lower by 0.43%.
On Tuesday, the Sensex surged more than 200 points as strong gains in Europe fuelled fresh buying in stocks on the domestic bourses.
Corporate earning season will kick start today with HDFC all set to report Q1 2012-13 numbers later in the day.
Among the shares that gained ground in morning trade were BPCL, Tata Steel, SBI and NTPC. Shares of MCX India rose by 3% as SEBI granted MCX Stock Exchange Ltd (MCX SX) to become a full fledged bourse.
Stocks that failed to lure investors in early trade were Hindalco, HUL, HCL Technologies, and ONGC.
Investors were cautious ahead of the IIP and inflation numbers due later this week, as they are expected to determine the course of RBI action towards the end of the month.