The 30-share index was trading 73.38 points or 0.18 per cent lower at 40,371.77 in morning trade; while the broader Nifty was trading 26.10 points or 0.22 per cent down at 11,895.40.
In the previous session, Sensex settled at 40,445.15, down 334.44 points or 0.82 per cent. Likewise, the 50-share Nifty shed 96.90 points or 0.81 per cent to close at 11,921.50.
Bajaj Finance was the biggest loser in the Sensex pack with a decline by 1.28 per cent in morning deals, followed by HUL, ITC, SBI, Kotak Mahindra Bank, Tech Mahindra, TCS and Axis Bank.
On the other hand, Maruti, Vedanta, Tata Steel, HDFC, Tata Motors and Sun Pharma emerged as the gainers, rising up to 1.72 per cent.
Meanwhile, the rupee appreciated by 10 paise to 71.10 in early session on Monday.
Foreign institutional investors (FIIs) offloaded shares worth Rs 867.66 crore in the capital market on Friday, while domestic institutional investors purchased shares to the tune of Rs 210.72 crore, data available with stock exchange showed.
Asian stocks were trading mostly higher on Monday following strong US job data amid weak Chinese exports.
American employers added 266,000 jobs in November, according to the Labor Department data released on Friday.
Marking the fourth straight fall, Chinese exports declined 1.1 in November compared to the same month a year earlier, mainly dragged by weaker shipments to the US that fell 23 per cent.
Brent futures, the global oil benchmark, fell 0.33 per cent to USD 64.18 per barrel.