Markets dropped on Monday after their longest winning run since last October, after index heavyweight Reliance Industries slid following a weaker-than-expected earnings report, while markets eyed policy cues from the upcoming central bank meetings.
Nifty was down 0.59% at around 16,620, in early trade while Sensex slipped 0.65% to around 55,710, after rising for six straight sessions. Last week, the indexes rose more than 4% each in their best performances since February 2021 amid expectations that inflation had peaked.
"Results and macroeconomic cues are very key triggers for the market as it consolidates following a sharp pullback," said Mayuresh Joshi, head of equity research at William O'Neil & Co in India.
"While rate hikes are a given, there are expectations that inflation will start receding in coming months. What needs to be seen is how much growth and spending will come down."
The US Federal Reserve is expected to deliver another 75-basis point interest rate hike later this week as it looks to tackle stubbornly high inflation, while India's central bank is set to meet next week to decide on policy.
India's most valuable company Reliance fell 4% in its biggest intraday percentage drop in more than three weeks, after its first-quarter profit missed estimates on a surge in costs.
Shares of Zomato plunged 14.3% to a record low as a one-year lock-in period for promoters, employees and other investors came to an end following a 2021 listing.
IT major Infosys slid 1.7% after missing quarterly profit expectations, while JSW Steel fell 1.5% as profit tumbled 86% on soaring costs.
ICICI Bank climbed 2.2% after its quarterly profit jumped and asset quality improved, before paring some gains.
Nifty components Tata Steel, Tech Mahindra and Axis Bank are scheduled to report their results later in the day.
