Equity benchmark Sensex dropped over 200 points in early trade on Monday tracking losses in index-heavyweights Reliance Industries, TCS and Infosys amid sustained foreign fund outflow.
Investors are also cautious ahead of the US presidential election this week, traders said.
The 30-share BSE index gyrated 473 points in the first 30 minutes of trade. It was trading 139.36 points or 0.35 per cent lower at 39,474.71 at 0940 hours.
Similarly, the broader NSE Nifty fell 41.85 points or 0.36 per cent to 11,600.55.
Reliance Industries was the top laggard, tanking over 4 per cent, followed by HCL Tech, TCS, Asian Paints, Bajaj Auto, Infosys and HUL.
On the other hand, ICICI Bank, IndusInd Bank, Bharti Airtel and SBI were among the gainers, rallying up to 5 per cent.
In the previous session, Sensex ended 135.78 points or 0.34 per cent lower at 39,614.07, while Nifty slipped 28.40 points or 0.24 per cent to 11,642.40.
Exchange data showed that foreign institutional investors sold equities worth Rs 870.88 crore on a net basis on Friday.
According to Arjun Yash Mahajan Head Institutional Business at Reliance Securities, volatility will prevail in Indian equities ahead of the US presidential election and the Supreme Court hearing on interest waivers.
"Additionally, strong auto sales volume from heavyweight Maruti and Hero MotoCorp and stronger than estimated 2Q performance from RIL and ICICI Bank should offer support to the market," he said.
Bourses in Shanghai were in the red, while Hong Kong, Seoul, and Tokyo were trading on a positive note in mid-session deals.
Meanwhile, international oil benchmark Brent crude was trading 3.27 per cent lower at $36.70 per barrel.
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