Benchmark indices pared early gains and were trading flat with oil shares leading the fall tracking weak global crude oil prices and profit taking in IT major Infosys.
At 9:35AM, the 30-share Sensex was down 27 points at 27,559 and the 50-share Nifty was up 2 points at 8,325.
Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 245 crore on Monday, as per provisional stock exchange data.
After contracting 4.2 per cent in October, industrial production increased at a five-month high of 3.8 per cent in November, even as consumer durables continued to be hit by low demand, showed data released by the Ministry of Statistics and Programme Implementation on Monday.
The Index of Industrial Production (IIP), which had contracted 1.3 per cent in November 2013, rose 2.2 per cent in the first eight months of this financial year, against only 0.1 per cent in the corresponding period of 2013-14.
Another set of data showed Consumer Price Index (CPI)-based inflation rose to five per cent in December from 4.38 per cent in the previous month, primarily due to a rise in food prices.
Asian markets are trading mixed. Nikkei has lost around 1.8% on the overnight losses in US markets and an appreciating yen. Hang Seng and Shanghai Composite indices have gained around 0.5% and 0.8% each.
Overnight, US markets closed lower for the second straight session dragged the losses in energy shares which declined as global crude prices slumped by another 5% on global supply glut and Goldman Sachs providing weak outlook for the sector. Dow Jones Industrial Average declined around 0.5%, S&P 500 lost 0.8% and Nasdaq Composite declined 0.8%.
The BSE FMCG index was the top gainer among the sectoral indices up 0.9% followed by Capital Goods, Power, Metal and Bankex among others.
Among the FMCG majors ITC was up 0.8% while Hindustan Unilever extended gains and was up 0.7% at Rs 903 hitting a fresh record high after recent upgrades by several brokerages including Deutsche Bank, Credit Suisse and JP Morgan.
In the financial sector SBI and HDFC were among the top Sensex gainers while private banks such as ICICI Bank, HDFC Bank witnessed profit taking.
Capital goods majors L&T and BHEL were up 0.5-0.9% after encouraging November industrial growth.
Infosys witnessed profit taking and was down 1.6% after strong gains in the previous sessions post the third quarter earnings.
Oil shares were down tracking weak global crude oil prices. ONGC and Reliance Industries were down 0.2-1.4% each.
In the broader market, the BSE Mid-cap and Small-cap indices were up 0.4-0.5% each.
Market breadth was strong with 906 gainers and 455 losers on the BSE.