Mumbai: The BSE Sensex surrendered its initial gains to trade lower by 97.64 points in late morning deals on Monday amid selling in realty, healthcare, metal, auto, consumer durables and basic materials counters.
Investors were wary after BJP's B S Yeddyurappa resigned as the chief minister of Karnataka, paving the way for the JD(S)-Congress combine to form the government.
Caution also set in ahead of key corporate earnings to be announced on Monday, brokers said.
IT, teck, telecom and energy witnessed buying interest.
The 30-share Sensex was trading at 34,750.66, showing a loss of 97.64 points, or 0.28 percent.
The broader Nifty index was trading at 10,558.15, down 38.25 points, or 0.36 percent.
Major losers were Sun Pharma 2.60 percent, Dr Reddy's 2.57 percent, Tata Motors DVR 2.30 percent, Tata Motors 1.80 percent and Axis Bank 1.60 percent.
Gainers included TCS 1.90 percent, ICICI Bank 1.52 percent, Coal India 1.35 percent, SBI 1.19 percent and ONGC 1.19 percent.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 166.15 crore on net basis, while domestic institutional investors (DIIs) bought equities to the tune of Rs 149.58 crore last Friday, provisional data showed.
Most Asian markets were trading higher as investors digested the thaw in US-China trade relations.
The US trade war with China is on hold after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin said on Sunday.
Updated Date: May 21, 2018 12:39 PM