The BSE Sensex and the NSE Nifty are flat a day after posting a record closing high on Wednesday. Losses track lower Asian markets after a survey of Chinese manufacturers showed surprisingly soft results.
Interest rate sensitive stocks fall on caution ahead of RBI's policy review on Tuesday.
Previous expectations for the RBI to hold rates have been thrown into doubt after the central bank recommended making taming high consumer inflation a priority.
However, Larsen & Toubro gains 3 percent after the company's Q3 margins at 11.6 percent beat some analysts estimates, dealers say.
Also, Cairn India gains 1 percent ahead of its December-quarter results later in the day.
BSE Sensex trims initial losses, still down 25 points
(PTI): The S&P BSE Sensex trimmed initial losses but was still quoted down by 25 points in late morning trade due to selling in IT, tech and metal sector stocks on the back of weak Asian cues.
Despite buying in capital goods and healthcare sectors, the Sensex resumed lower at 21,319.69 and hovered in a range of 21,355.34 and 21,264.71 before quoting at 21,312.77 at 1030 hrs, showing a loss of 24.90 points, or 0.12 per cent, from its last close.
L&T rose 3.14 per cent after the company reported a strong growth in order inflow in the third quarter of 2013.
The NSE 50-share Nifty also eased by 9.80 points, or 0.15 per cent, to 6,329.15 at 1030 hrs.
Major losers were M&M (2.30 per cent), Wipro (1.98 per cent), Bajaj Auto (1.56 per cent), ONGC (1.45 per cent), TCS (1.35 per cent), Tata Steel (1.13 per cent) and Hindalco Ind (1.00 per cent).
Other gainers were Sun Pharma (2.05 per cent), BHEL (1.06 per cent), Tata Power (0.98 per cent) and Bharti Airtel (0.98 per cent).
Asian stocks declined in early trade after a private gauge of China's manufacturing in January unexpectedly contracted.
Key benchmark indices in Japan, South Korea, Singapore, China, Taiwan and Hong Kong were down 0.1-1.4 per cent.
Foreign institutional investors (FIIs) bought shares worth a net Rs 279.45 crore as per provisional data from the stock exchanges.