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Markets extended losses in noon deals as weakness in heavyweight names like ICICI Bank, HDFC, ITC and Reliance Industries weighed on the indices.
At 1410 hrs, the Sensex was down 397 points at 19,867 and the Nifty dropped 130 points to trade at 5,882.
This is the second consecutive day of declines, after RBI Governor Raghuram Rajan surprised markets in his maiden policy review on Friday by raising interest rates to ward off rising inflation.
In the broader markets, the midcap index slipped 1% and the smalllcap index gave off 0.6%, outperforming the BSE benchmark index which was down nearly 2%.
At 1410 hrs, the Indian Rupee was quoting at 62.67 to a Dollar.
Global Markets
Most Asian markets slipped on Monday as a soft lead from Wall Street and renewed concerns about the Federal Reserve's policy stance took the shine off an upbeat survey on China's manufacturing sector.
MSCI's broadest index of Asia-Pacific shares outside Japan, up early in the day, was off 0.1 percent.
Some Asian markets had significant gains, thanks to a survey that showed a promising pick up in Chinese export orders, another sign of stabilisation in the world's second biggest economy.
Shares in Shanghai gained 1.0 percent and Taiwan's main index was up 0.9 percent. South Korea firmed initially, but then was off 0.1 percent flat. Australian shares were down 0.5 percent and Japanese markets were closed for a holiday.
European markets were largely in the green with CAC and DAX up 0.2% while FTSE was in the red, losing 0.05%.
Sectors & Stocks
Barring Consumer Durables, IT and Teck indices which were up 0.4-3%, all the other indices were in the red.
Rate sensitives- Bankex and Realty indices were down 4-4.5% followed by Capital Goods, PSU, Oil & Gas, FMCG, Power and Health Care indices, losing 1-3%.
IT majors- Wipro, Infosys and TCS gained 0.4-1.6% along Sesa Goa and Hero MotoCorp up 1% each were the only gainers among the Sensex-30.
Among the ones in the red were ICICI Bank, SBI, ONGC, Maruti Suzuki, HDFC,L&T and Tata Power down 4-5%.
BHEL, Tata Steel, HDFC Bank, Bharti Airtel, Gail India, Jindal Steel, Hindustan Unilever, ITC and RIL down 2-4% were the other notable losers.
The market breadth was very negative. 1294 stocks declined while 879 stocks advanced on the BSE.
