At 9:30 AM, the 30-share Sensex was down 121 points at 27,241 and the 50-share Nifty was down 28 points at 8,196.

In the broader market, both BSE midcap and smallcap indices have underperformed their larger peers with losses of around 0.6% each. Market breadth in BSE is negative with 841 declines against 368 advances.

Along with the WPI data, due later today, traders will keep a watch on Parliament proceedings for cues. The outcome of the Federal Open Market Committee (FOMC) monetary policy review scheduled tomorrow will also be in focus.

Further, markets would closely analyse the data on corporate advance tax payment as it would provide clues on Q3 December 2014 corporate earnings.

Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 864.96 crore on Friday, as per provisional stock exchange data.

Among global markets, Japanese stocks fell on Monday after slumping oil prices toppled Wall Street shares, while investors drew little comfort from Prime Minister Shinzo Abe's landslide win in a snap election over the weekend.

Last week, US stocks suffered their worst weekly drop for 2-1/2 years, as free-falling oil prices hit the energy and commodities sectors and raised the spectre of falling global demand and deflation.

Buzzing Stocks

BSE FMCG index alone is in the green with a gain of 0.2%.

BSE IT index is the top loser and has declined close to 2% in opening deals followed by BSE Teck, Consumer Durables and Capital Goods indices with losses of over 1% each.

TCS has declined over 3% after the company said that it expects a weak third quarter, because of the holiday season in its key markets impacting some of its main verticals. Wipro has lost around 1.6% while Infosys has lost 0.5%.

Oil and gas shares are under pressure. Reliance and GAIL have lost 0.7% and 0.8% each.

ONGC has gained close to 1.5% after it announced three new oil and gas discoveries in Krishan Godavari Basin and Mumbai offshore and said it will pay its shareholders an interim dividend of 100%.

Among auto stocks, Tata Motors has declined around 0.8% as its prized acquisition, Jaguar Land Rover has posted sluggish sales numbers.

Index heavyweights, HDFC and ITC are trading with gains of 1.2% and 0.8% each.