Indian shares fell on Thursday along with the 10-year bond yield, while the rupee also opened marginally weaker against the dollar, amid bets that the central bank would cut interest rates at its policy meeting which ends later in the day.
The Reserve Bank of India (RBI) is expected to cut rates for the second consecutive time this year, a Reuters poll showed. More than 85 percent of the economists polled forecast that RBI would cut the repo rate to 6.00 percent from the current 6.25 percent.
This comes shortly before the first phase of the national elections in which Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) is seeking a second term at the centre.
"Markets have already priced in a 25-basis-point cut, so now it will depend on the tone of the policy," said Neeraj Dewan, a director with Quantum Securities, New Delhi.
"If RBI cuts 25 bps and signals further rates cuts down the line this year, it would be seen as positive for the markets."
The 10-year benchmark government bond yield fell to 7.38 percent from Wednesday's close of 7.42 percent, while the rupee opened at 68.54 to the dollar compared to the previous close of 68.42. It was trading at 68.68 as of 0445 GMT.
The broader NSE Nifty was down 0.17 percent at 11,624.15 as of 0523 GMT, while the benchmark BSE Sensex was 0.16 percent lower at 38,815.81.
Nifty's IT index was among the top drags, with HCL Technology Ltd, which was down 2.3 percent, leading declines. Wipro Ltd and Tech Mahindra Ltd were down 1 percent each.
Jet Airways Ltd extended falls to a sixth session, falling 3.5 percent. The airline is operating only 28 planes out of its 119-strong fleet.
Among gainers, shares of batteries maker Amara Raja Batteries Ltd rose as much as 3.8 percent after the Galla Family agreed to buy 2 percent stake of Amara Raja from Johnson Controls.