Indian shares opened 1.4 percent lower on Friday at the restart of trade after a coordinated attack by gunmen across the city of Mumbai forced markets to stay closed the day before.

The benchmark 30-share Sensex was down 126.1 points at 8,900.61 in early dealings.

"These attacks will dampen sentiment. The markets could see lacklustre trade initially," said Atul Mehra, head of capital markets with J M Financial.

The bond and forex markets also re-opened for trading Friday with the rupee quoted at 49.7 against the dollar.

Authorities shut down the exchanges as troops surrounded the Taj and Oberoi/Trident five-star hotels that had been invaded by gunmen with automatic weapons and grenades, killing more than 130 people.

Business leaders have expressed widespread fears that the attacks will dent confidence in India's economy, which is already reeling from a huge withdrawal of foreign funds from its once booming stock market.