India's Nifty 50 and Sensex fell on Monday after rallying to record highs for most of this month as high-weightage banks and information technology (IT) stocks took a breather after a recent rise.

The benchmark NSE Nifty 50 index lost 0.14% to 21,427.45 points, while the S&P BSE Sensex shed 0.22% to 71,324.67, as of 9:59 a.m. IST.

Banks and financials lost about 0.5% each, after rising 2% in the last two sessions. Financial services is the heaviest sector in the Nifty 50 index.

Information technology stocks shed 0.3%, snapping a two-session rally, in which the index rose about 8%.

IT companies, which earn a significant share of their revenue from the U.S., jumped after the U.S. Federal Reserve's policy commentary last week raised hopes of a rate cut in the first half of 2024.

"We expect a near-term consolidation in the market due to elevated valuations," said Vinod Nair, head of research at Geojit Financial Services.

The Nifty and Sensex have gained about 6.5% so far this month and are set for their best monthly performance in 2023, with the Nifty closing at a record high in nine of the previous 11 sessions.

Besides the easing global interest rate outlook, the rally has also been driven by the Reserve Bank of India raising its fiscal 2024 growth forecast, the return of foreign inflows, sustained domestic inflows, and moderation in oil prices.

Among individual stocks, Zee Entertainment Enterprises lost 3.3% on seeking further extension of a merger deadline from the Indian arm of Japan's Sony Group. Zee is the heaviest stock on the media index, dragging it down 0.8%.

Lupin gained 3% on receiving approval from U.S. drug regulator for key drugs. The stock was among the top gainers in the pharma index, which rose 1.31%

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Varun H K and Sonia Cheema)