The Sensex traded 25 points or 0.13 per cent lower at 18,485, while the Nifty declined 7 points to 5,568 as of 09.40 a.m.
Markets have been in a strong bear grip as fears of political instability have grown over the last fortnight. Foreign institutional investors sold shares for the third day weighing on sentiments.
Independent analyst Sarvendra Srivastava said markets are oversold so a bounce is expected, but the Nifty has strong resistance at 5,650 mark.
Maruti Suzuki, India's biggest car maker, was the top Nifty gainer after CLSA maintained its "buy" call on the stock. Maruti shares were up 3 per cent against a 0.6 per cent gain in BSE Auto index.
High beta realty stocks outperformed. India's biggest developer DLF gained over 2 per cent after the company said it has divested two non-core wind assets for Rs 241 crore in Rajasthan.
Gas utility Gail India shares rose 1.8 per cent on an upgrade by UBS. Gail's valuations are at a 5-year low, the brokerage said.
20 stocks traded lower on the Nifty led by utility vehicles maker M&M, down 1.5 per cent. IT stocks including frontliners such as Infosys and TCS extended weakness.
Japanese equities soared and the yen continued its tumble against the dollar and the euro on Friday after the Bank of Japan's unprecedented monetary expansion, but Asian shares eased ahead of U.S. jobs data amid rising concern over the American economy.
The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent. Japan's Nikkei stock average jumped more than 4 per cent, topping the 13,000 level for the first time since August 2008.
(With inputs from Reuters)