Hindalco Industries (HALC.NS), the country's largest aluminium maker, fell 5.5 percent after its U.S. unit Novelis cut its fiscal year earnings estimate for the second time.
Leading mobile operator Bharti Airtel (BRTI.NS) fell as much as 2.4 percent, extending their 6.5 percent drop in the previous session, as brokerages cut their price targets on the stock after the reported an eighth straight drop in quarterly profit.
Export-driven software companies such as Tata Consultancy Services (TCS.NS) and Infosys (INFY.NS) slipped 1.4 and 0.9 percent, respectively after industry body NASSCOM cut revenue guidance for most software exporters.
Third-ranked Wipro (WIPR.NS) lost 1.2 percent.
Thomas Cook (India) Ltd (THOM.NS) bucked the trend and jumped as much as 16 percent, a day after its UK-based parent Thomas Cook Group Plc (TCG.L) said it would look to sell its stake in the Indian travel operator.
By 10:19 a.m. (0449 GMT), the main 30-share BSE index was down 0.46 percent at 17,626.09, with 20 of its components declining.
Investors were also wary after Greek political leaders failed to conclude a deal for a bailout package crucial to avoiding a messy debt default.
Discussions would continue with one issue left to be resolved, so a deal could be concluded before a meeting of euro zone finance ministers on Thursday, Prime Minister Lucas Papademos said in a statement.
There will be some weakness in the form of profit-booking, but I don't see that stopping the market from building up gains again, said Jigar Shah, senior vice-president with KIM ENG Securities.
The 14-day Relative Strength Index was at 68.6, near the 70 mark that indicates stocks are overbought.
Analysts said strong demand from foreign institutional investors would help stocks to rebound in the coming sessions.
Foreign funds have invested $3.6 billion in local equities so far this year, data from the Securities and Exchange Board of India showed. In 2011, they were net sellers of about $500 million.
The 50-share NSE index was down 0.41 percent at 5,345.75. In the broader market, losers led gainers by about 1.6:1, on volume of around 205.8 million shares.
Elsewhere in the region, the MSCI's broadest index of Asia Pacific shares outside Japan was down 0.33 percent, while Japan's Nikkei was down 0.14 percent.
STOCKS ON THE MOVE
* Tata Steel Ltd (TISC.NS), the world's No.7 steelmaker, shed 1.3 percent ahead of its December quarter results, expected after market hours. Analysts on average estimate a 41 percent fall in net profit to 5.6 billion rupees, according to Thomson Reuters I/B/E/S.
* Engineering and construction company Unity Infraprojects (UTIL.NS) rose 3.4 percent after it received two orders worth 4.85 billion rupees.
TOP 3 BY VOLUME
* IFCI (IFCI.NS) with 13.4 million shares.
* Hindalco with 11.1 million shares.
* Suzlon Energy (SUZL.NS) with 9.8 million shares.