The BSE Sensex fell 0.4 percent in early trade on Friday, with financials leading the decline ahead of December inflation data.

Steel Authority of India, the country's largest steel producer, fell as much as 6 percent after it warned rising raw material prices were taking a toll on margins and may force further increases in product prices.

Tata Coffee shares were up 7.1 percent after U.S.- based Starbucks signed a pact with the Indian firm to buy coffee from India and explore opening retail stores in the country.

At 9:21 a.m. (0351 GMT), the 30-share BSE index was down 0.41 percent at 19,104.41 points, with 25 components declining.

The 50-share NSE index was down 0.5 percent at 5,722.65.

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