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By 9:30, the Sensex was lower by 19 points at 20,696 mark and the Nifty dipped by 4 points at 6,164 levels.
Market participants said expectations of a rise in interest rates by RBI and Fed comments on its stimulus programme were likely to keep the market nervous in the week ahead, which will also see the issue of the wholesale price inflation figures.
"Based on the data coming from the US, markets expect tapering of the Fed's stimulus programme to start sooner than later. If the Fed announces this could start in January itself that would be a big negative for the markets" said Dipen Shah, senior vice-president (research), Kotak Securities.
The Fed will hold its two-day Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday, followed by a press conference by Fed Chairman Ben Bernanke.
US stocks ended Friday's session little changed after a three-day drop, but logged their worst week in nearly four months on concern that the Federal Reserve could signal the start of a reduction in its stimulus program at its policy-setting meeting next week.
In a bullish signal, the S&P 500 closed on Friday right above 1,775 - considered a technical support level.
Asian markets were subdued on Monday at the start of a week in which investors may finally find out the fate of U.S. stimulus, in what looks set to be a very close call indeed.
Back home, BSE Healthcare index has gained by over 1%. However, BSE Bankex, Capital Goods, Realty, Power and Oil & Gas indices have declined marginally.
The main gainers on the Sensex at this hour include Coal India, TCS, ONGC, ICICI Bank and Tata Steel, all gaining between 0.5-1%.
On the losing side, JSPL, BHEL, HDFC Bank, ITC and Sun Pharma have declined between 0.4-1%.
The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up by nearly 0.2% each.
The market breadth in BSE remains positive with 480 shares advancing and 386 shares declining.
