The benchmark BSE Sensex plunged by over 324 points to 26,401.51 in late morning deals, tracking heavy selling in other Asian indices after Bank of Japan kept policy rates unchanged and refrained from offering more stimulus.
Sustained selling was seen in bank, capital goods, teck, IT, energy, FMCG, auto, financials, power, healthcare and Oil&Gas sectors.
Weak global cues after the US Federal Reserve Chair Janet Yellen reiterated global growth concerns and Britain's potential exit from the European Union also weighed on the sentiment.
The 30-share index resumed lower at 26,686.03 and slid to 26,393.55. It was quoting at 26,401.51 at 1100 hours, showing a loss of 324.83 points or 1.22 per cent.
The NSE 50-share Nifty also was trading down by 99.35 points, or 1.21 per cent, at 8,107.25.
Major losers were Bharti Airtel 2.59 per cent, Maruti 2.53 per cent, NTPC 2.21 per cent, ITC 2.07 per cent and L&T 1.92 per cent.
Meanwhile, Foreign Portfolio Investors sold shares worth net Rs 108.23 crore yesterday, as per provisional data.
Overseas, Asian markets dropped on US Fed's decision to keep interest rates on hold. In Japan, the Nikkei 225 index was down 2.26 per cent after the Bank of Japan (BoJ) kept monetary policy steady as was widely expected.
US stocks ended lower yesterday marking a fifth session of losses, after the US Fed left interest rates unchanged and backed off an aggressive stance on future rate hikes.
