Shares broke their longest gaining streak since last October on Monday, as automakers slid and index heavyweight Reliance Industries dragged after its earnings fell short of expectations.
Nifty fell 0.53% to 16,631, while Sensex slipped a tad more to 55,766.22, 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, even as markets across the globe geared up for central banks to deliver more rate hikes.
The US Federal Reserve is expected to raise interest rates by another 75 basis points later this week as it looks to tackle stubbornly high inflation, while India's central bank will meet next week to set the policy roadmap.
India's most valuable company Reliance fell 3.3% on its worst day since July 1, after its first-quarter profit missed estimates due to surge in costs.
Shares of food delivery firm Zomato plunged 11.3% to a record low as a one-year lock-in period for promoters, employees and other investors came to an end following a blockbuster listing last year.
The Nifty Auto index, which had jumped 8% this month up to Friday's close, slid 1.7%, led by a fall in Mahindra and Mahindra and top carmaker Maruti Suzuki.
Ahead of quarterly results, Nifty component Tata Steel added 2.6%, Axis Bank slipped 0.5%, while Tech Mahindra lost 1.1%.
The Nifty Metal index was a bright spot among the sub-indices, climbing 1.5% to its highest since June 10.