The Bombay Stock Exchange's Sensex faced selling pressure in early trade on Monday, and dropped by about 206 points.
Reserve Bank of India (RBI) Governor Raghuram Rajan's decision last week to raise the repo rate to combat inflation, and keep CRR unchanged is being blamed for the slow take-off in stock pricing on Monday morning.
The 30-share index fell by 206.61 points, or 1.01 per cent, to 20,057.10, with shares of banking, realty, oil and gas and auto sectors leading the fall. It had plunged by 382.93 points on Friday.
The National Stock Exchange index (Nifty) declined by 55.25 points, or 0.92 per cent, to 5,956.85.