At 10:07 am, the Sensex traded down 171 points - or 0.5 per cent - at 36,407 while the Nifty was down 55 points at 10,906.

At that time, top laggards on the 50-scrip index were Mahindra & Mahindra, Vedanta, IndusInd Bank, Tata Steel and Maruti Suzuki India, trading between 1.4 per cent and 2.6 per cent lower.

Analysts awaited more quarterly earnings from large cap corporates.

"While the IT, energy, and private bank majors have delivered good results in what was a particularly challenging quarter, the broader market breadth looks weak," news agency Reuters quoted Sunil Sharma, chief investment officer, Sanctum Wealth Management, as saying.

Equities in other Asian markets moved lower after the International Monetary Fund cut its world economic growth forecasts for 2019 and 2020, citing weakness in Europe and some emerging markets. MSCI's broadest index of Asia-Pacific shares outside Japan was last seen trading 0.5 per cent lower, drifting away from a recent seven-week top. Japan's Nikkei, which had opened firmer, was flat.

The IMF also noted that failure to resolve trade tensions could further destabilise a slowing global economy. In its second downgrade in three months, the global lender predicted the global economy to grow at 3.5 per cent in 2019 and 3.6 per cent in 2020, down 0.2 and 0.1 percentage point respectively from its forecasts last October.

India, however, appears to be fairly well insulated from the global risks, it noted, forecasting an economic growth of 7.5 per cent in 2019.

"The Indian economy is quite healthy. We revised it up slightly and that was because of lower commodity prices and the effect that that would have on monetary policy," IMF chief economist Gita Gopinath told NDTV on the sidelines of the annual World Economic Forum meeting in Davos. (Watch)

Net sale of equities by foreign portfolio investors (FPIs) stood at Rs 299.79 crore on Monday, while net purchases by domestic institutional investors (DIIs) were at Rs 520.80 crore Monday, provisional data from the NSE showed.