The BSE Sensex falls 0.19 percent to its lowest level since June 5 while the broader Nifty is 0.25 percent lower, heading for their second straight day of declines.
Falls also track weak Asian stocks as crude extended gains and tested nine-month highs on fears the insurgency in Iraq could worsen and affect oil exports.
However, Tata Consultancy Services (TCS) gains 1.2 percent after the company kept its outlook on first-quarter margins and revenue unchanged on Friday.
Marketa: Early trade
(PTI) The benchmark BSE Sensex dropped over 34 points in opening trade today as funds and retail investors indulged in reducing positions on weak Asian cues amid fears over the growing crisis in Iraq.
Besides, a cautious approach adopted by participants ahead of wholesale inflation data for May to be released later in the day, also influenced the sentiments.
Stocks of realty, metals, capital goods, consumer durables, PSUs, oil & gas and banking sectors led the fall.
The 30-share Sensex fell by 34.29 points, or 0.14 per cent, to trade at 25,193.88. It had lost 348.04 points in the previous session on Friday.
The 50-share NSE Nifty, which had lost 107.80 points in Friday's trade, fell by 16.05 points, or 0.21 per cent, to 7,526.05.
Apart from profit-booking by retail investors, a weakening trend in the Asian region on worries over escalating violence in Iraq, dampened the trading sentiments here, brokers said.
Among other Asian markets, Hong Kong's Hang Seng fell by 0.07 per cent, while Japan's Nikkei shed 0.62 per cent in early trade today.
The US Dow Jones Industrial Average ended 0.25 per cent higher in Friday's trade.