The blue-chip NSE Nifty 50 index was down 0.16% at 21,702.60 points and the S&P BSE Sensex fell 0.29% to 71,731.20, as of 11:04 a.m. IST.

“Unsustainable valuations and cooling off in earnings across segments remain worrisome for the market,” said Dipan Mehta, founder and director at Elixir Equities.

“Post key events like (India’s) budget and Fed policy this week, we see scope for correction, time-correction or price-correction,” Mehta added.

The Indian government is due to announce the federal budget on Thursday.

The highest weighted of the 13 major sectors, financial services dropped 0.5%.

Bajaj Finance lost about 5% to hit a five-month low and was the top Nifty 50 loser. The company posted a smaller-than-expected rise in quarterly profit, while its asset quality deteriorated.

“Given the asset quality deterioration, credit cost is likely to remain elevated in the near term,” said analysts at Ambit Capital.

Information technology stocks added 0.85% ahead of U.S. Federal Reserve rate decision and commentary, due on Wednesday.

The Fed commentary will provide cues into rate trajectory, and influence U.S. Treasury yields and foreign investor strategy.

Oil and gas index gained 1.5%, led by 3% rise Bharat Petroleum Corporation.

The state-run oil marketing company reported higher-than-expected December quarter profit, helped by strong refining and marketing margins, during market hours on Monday, triggering a 3.85% jump.

Power generating company NTPC lost about 3% on reporting a fall in revenue in the December quarter.

KEC International rose 3% on winning new orders worth 13.04 billion rupees ($156.87 million) across its businesses.