The Sensex lost points 64 in early trade, while the Nifty lost 14 points at 9.30 am IST. Jaiprakash Associates which sold one its Gujarat cement divisions to Ultratech came under selling pressure and the stock dropped 5 per cent on profit booking.
Ultratech Cement, however, gained 1 per cent in trade. Other cement stocks were strong after the Ultratech Cement - Jaiprakash deal with ACC and Ambuja Cement both gaining ground in trade.
Banking stocks and financial institutions came in for some severe selling pressure with ICICI Bank, HDFC Bank, HDFC and IndusInd Bank among the losers.
However, PSU Banking stocks continued their spectacular rally with notable gainers from the space being Union Bank, Syndicate Bank and Allahabad Bank.
Software stocks were also subdued in trade with notable losers being TCS, Wipro and Infosys, which dropped on the back of gains in the rupee.
Top Nifty gainers in trade today were IDFC, GAIL, Bharat Heavy Electricals, NTPC, Reliance Infra and Larsen and Toubro.
Infrastructure companies were trading marginally lower ahead of the IIP data to be declared later today.
Markets in Asia edged higher with the exception of the Japanese Nikkei which dropped in trade today. Most of the other indices were trading higher including the Chinese Shanghai Composite, the Hong Kong's Hang Sang and the Korean Kospi.
Meanwhile, the rupee gained 31 paise and was last trading at 63.06 against the dollar.