Further, the Nikkei/Markit Services Purchasing Managers' Index fell sharply to 50.1 in November from October's eight-month high of 53.2.

Meanwhile, Federal Reserve Chairperson Janet Yellen said that the US economy is growing sufficiently, thus, laying the groundwork for a December interest-rate hike.

Emerging markets are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies.

At 11:40 am, the Sensex was lower by 143 points at 25,975 and the Nifty slipped by 39 points at 7,892.

According to Motilal Oswal market outlook, "A breach above 8,000 will help Nifty resume its momentum towards 8,100-8,150, until then it could remain consolidative within the range of 7,800-8,000. Continued Call writing and lack of activity in Nifty futures keeps the bias neutral. Decline in India VIX despite the fall indicates".

In the currency front, the rupee fell by 13 paise to 66.72 against the dollar due to fresh demand for the American currency from importers.

Besides, sovereign bond yields tumbled on Thursday after the Reserve Bank of India announced bond purchases of up to 100 billion rupees ($1.50 billion) to infuse liquidity into the banking system.

Asian stocks slipped and the dollar advanced on Thursday after hawkish comments from Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month.

Japan's Nikkei lost 0.3%, moving in a tight range as a wait-and-see mood prevailed ahead of the European Central Bank's policy decision later in the day.

Back home, Tata Steel, BHEL, ITC, Cipla, Lupin, ONGC and Vedanta are top Sensex losers, all tumbling between 1-2%.

Tata Steel said its Singapore-based arm T S Global Holdings has executed agreements for loan facilities worth $1.5 billion to refinance the debt which will be used to pay the existing term loan facilities of T S Global Holdings. Shares of Tata Steel have slumped over 2%.

ONGC has slipped over 1%. International oil and gas consultant DeGolyer & MacNaughton (D&M) on Tuesday gave its final report on the dispute between Oil and Natural Gas Corporation (ONGC) and Reliance Industries (RIL), establishing natural gas — believed to be worth Rs 11,000 crore. Reliance Inds is up almost 1%.

Axis Bank is up 0.7%. The bank has launched a 'display variant' debit card which does away with the hassles of generating one time password (OTP) over SMS while transacting.

Wipro has gained over 1% after the company signed an agreement with German-based Landesbank Baden-Wuerttemberg (LBBW) to acquire cellent AG for euro 73.5 million which provides information technology consulting and software services, is a fully-owned subsidiary of LBBW, a provider of banking and financial services.

Shares of hotel companies were trading higher on the bourses for the second straight day on the back of heavy volumes in an otherwise weak market.

EIH Associated Hotels (up 17% at Rs 303), Kamat Hotels (14% at Rs 67.20), EIH (7% at Rs 134), Advani Hotels & Resorts (6% at Rs 59), Gujarat Hotels (5% at Rs 144) and ITDC (5% at Rs 189) were up between 5%-17% on the BSE.

Just Dial has dipped 6% to Rs 863, extending its past four day’s decline on the BSE, after the stock today turned ex-date for buy back of shares.

Shares of Tree House Education & Accessories has locked in upper circuit for the third straight day, up 10% at Rs 202 on the BSE after a huge block deals executed on the counter.