Indian shares declined on Monday, dragged by energy stocks on lacklustre earnings from Oil & Natural Gas Corporation and Tata Power Company.
The NSE Nifty 50 index was down 0.54% at 21,665.50, while the S&P BSE Sensex fell 0.48% to 71,253.37, as of 10:24 a.m IST.
"Investor caution prevails after the Reserve Bank of India's uninspiring monetary policy commentary last week and worries of delay in U.S. rate cuts," said Prashant Tapse, senior vice president of research at Mehta Equities.
The RBI doused hopes of early rate cuts and projected elevated inflation for fiscal 2025 in its policy decision on Thursday.
Eleven of the 13 major sectors declined on Monday. Energy index dropped 2.5%.
ONGC, which posted a profit fall in the December quarter, shed 3%, while Tata Power lost 5.6% after reporting a marginal profit increase in the quarter.
IT added 0.8% after U.S. inflation data for December fuelled hopes of soft landing for U.S. economy, a key revenue source for the sector.
Pharma added 0.7%, led by the post-results increase in Aurobindo Pharma and Divi's Laboratories , while Dr. Reddy's Laboratories gained on closure of U.S. FDA probe.
The more-domestically focussed mid-caps and small-caps declined 1.6% and 3%, respectively.
The frothy valuations of the broader market are a matter of concern and safety lies in large-caps from a long-term perspective, said VK Vijayakumar, chief investment strategist of Geojit Financial Services, a view also shared by G Chokkalingam, founder of Equinomics Research.
Among individual stocks, Hero MotoCorp shed 3% after beating third-quarter profit estimates.
India's retail inflation likely eased to a three-month low of 5.09% in January on slowing food price rises, according to a Reuters poll of economists. The data is due post the closing bell on Monday.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sohini Goswami and Dhanya Ann Thoppil)