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At 9:42 am, the Sensex traded 48 points lower at 36,534 and the Nifty was at 10,904, down 8 points from the previous close.
Top laggards on the 50-scrip index included Wipro, Tech Mahindra, TCS, Bharti Airtel and Indiabulls Housing Finance, trading between 0.8 per cent and 3.6 per cent lower at the time.
Losses in the IT majors dragged the Nifty IT index as much as 0.8 per cent lower.
Analysts said caution prevailed among investors as the markets awaited the outcome of the Reserve Bank of India's monetary policy.
The central bank's Monetary Policy Committee's three-day meeting will conclude on Thursday. Any action on the key lending rates and its policy stance will be monitored closed.
"Global uncertainty and the election-related volatility are key near-term risks in the market," said Hemang Jani, head-advisory, Sharekhan by BNP Paribas.
Large caps such as Hindustan Petroleum, GAIL, Punjab National Bank, and Tech Mahindra are scheduled to report their quarterly earnings in the day.
Equities in other Asian markets extended their gains as overnight strength on Wall Street and the Federal Reserve's dovish turn underpinned risk appetite.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.4 per cent and hovered near its four-month high marked on Friday. Japan's Nikkei average was flat on the day but at its highest level in seven weeks.
The Sensex and Nifty have added 991 points and 260 points (2.8 per cent and 2.5 per cent) in past three trading sessions respectively.
(With agency inputs)