The S&P BSE Sensex index fell as much as 176.92 points to 38,946.04, and the NSE Nifty benchmark moved to 11,651.00, down 48.65 points from the previous close. The benchmark indexes, however, turned flat within the first hour of trade.
At 10:03 am, the Sensex traded 5.46 points - or 0.01 per cent - lower at 39,117.50, while the Nifty was up 3.00 points - or 0.03 per cent - at 11,702.65.
Market breadth was largely neutral, with 811 stocks trading with gains on the BSE and 767 struggling with losses. On the NSE, 793 stocks advanced while 804 declined in morning deals.
Top percentage laggards on the 50-scrip index at the time were Zee Entertainment, Bharti Infratel, UPL, Eicher Motors, HCL Tech and HUL, trading between 0.84 per cent and 2.27 per cent lower.
Reliance Industries, ONGC and Kotak Bank weighed the most on Sensex.
On the other hand, top Nifty gainers were ONGC, Bharat Petroleum, NTPC, Power Grid and Indian Oil, trading with advances of between 1.25 per cent and 1.69 per cent.
Equities in other Asian markets traded on a lacklustre note as investors awaited to see if anything will come of China-US trade talks later this week.
US President Donald Trump is slated to meet one-on-one with at least eight world leaders at the G20 summit in Osaka, including China's President Xi Jinping and Russian President Vladimir Putin.
Early trade was very light with MSCI's broadest index of Asia-Pacific shares outside Japan up a minor 0.09 per cent. Japan's Nikkei was all but flat, as was the South Korean market
E-Mini futures for the S&P 500 edged up 0.08 per cent. Overnight in the US, the Dow Jones industrial average ended up 0.03 per cent on Monday, whereas the S&P 500 and Nasdaq lost 0.17 per cent and 0.32 per cent respectively.
The Sensex and Nifty had ended 0.18 per cent and 0.21 per cent lower on Monday.