The Sensex slumped over 500 points and the Nifty settled closer to its crucial psychological level of 7,600 after the Reserve Bank of India disappointed Dalal Street with a smaller rate cut.
The Sensex closed 516 points lower at 24,884 and Nifty slumped 156 points to settle at 7,603.
Market participants were hoping that Raghuram Rajan would surprise the Street with a bigger cut in interest rates or with a cut in cash reserve ratio (CRR) after Finance Minister Arun Jaitley stuck to path of fiscal consolidation by setting fiscal deficit target of 3.5 per cent of GDP for FY16-17. Cut in small savings rate also boosted the chances of a bigger rate cut.
However, dashing the hopes of marketmen, Dr Rajan cut interest rates by 25 basis points with no cut in CRR.
Rate sensitive banking, realty and auto stocks were among the worst hit in trades today. The banking sub-index on the National Stock Exchange, Bank Nifty closed 3 per cent lower while, auto and realty indices also plunged 3 per cent each.
From the Nifty-50 basket of shares, 46 stocks closed lower while only 4 managed to end higher.
ICICI Bank, State Bank of India, Yes Bank, Maruti Suzuki, Tata Motors, Larsen & Toubro, Axis Bank, Kotak Mahindra Bank, Tata Steel and BHEL were among the top Nifty losers, down 3.4-5.5 per cent each.
The overall market breadth was negative as 1,628 stocks declined while 885 ended higher.
3:14 p.m.: Banking stocks were among the worst hit in trades so far. The Bank Nifty plunged 3 per cent or 494 points; Canara Bank, ICICI Bank, Bank of India, State Bank of India, Bank of Baroda, Punjab National Bank, Yes Bank and Federal Bank were among the losers, down 3-6 per cent each.
3:09 p.m.: The stock markets extended losses in the late noon deals. The Sensex slumped 503 points to 24,894 and Nifty plunged 150 points to 7,608.
2:57 p.m.: Canara Bank was the top loser from the mid-cap space, down 5.2 per cent to Rs 188. Oriental Bank of Commerce, Union Bank of India, Exide Industries, Bank of India, JP Associates, Reliance Capital, Yes Bank and Sun TV were also among the losers, down 3.7-5 per cent each.
2:48 p.m.: The broader markets were also witnessing selling pressure. The mid-cap and small-cap indices were down over a per cent each.
2:38 p.m.: Market breadth remains negative as 1,653 stocks decline while 755 advance.
2:05 p.m.: The stock markets were trading close to day's lowest levels. The Sensex fell as much as 482 points to 24,917 and the Nifty plunged 146 points to 7,613.
1:55 p.m.: Capital goods stocks face selling pressure. The BSE capital goods index falls 2.2 per cent; Sadbhav Engineering was the top loser from this space, down 4.4 per cent to Rs 281. BHEL, Sterlite Technologies, BEML, Larsen & Toubro, Suzlon and Bharat Electricals were also among the losers.
1:46 p.m.: Stock markets continue to trade with a negative bias. The Sensex was down 393 points at 25,006 and Nifty fell 117 points to 7,642.
1:26 p.m.: From the Nifty-50 basket of shares, 47 were falling while 3 were declining. Adani Ports was the top loser in the Nifty, down 5.65 per cent to Rs 229. ICICI Bank, Bharti Airtel, Bank of Baroda, Tata Motors, Hindalco, State Bank of India, Yes Bank and BHEL were also among the losers, down 3.2-4.5 per cent each.
On the other hand, Power Grid, BPCL and Lupin were among the notable gainers.
1:17 p.m.: Indiabulls Real Estate was the top loser from the real estate space, down 4.75 per cent to Rs 54.20. HDIL, Unitech, DB REalty, Sobha Developers, DLF, Oberoi Realty, Prestige Estates, Godrej Properties and Phoenix Mills were also among the losers.
1:06 p.m.: Metal stocks extend slide. BSE metal index top sectoral loser falls 2.65 per cent.
12:54 p.m.: Stock markets extends losses. Sensex plunges 406 points to 24,992.83 and Nifty declines 114 points to 7,644.
12:49 a.m.: Relaxo zooms 18 per cent to hit intraday high of Rs 521.40 after Jwalamukhi Investment Holdings a unit of WestBridge bought 18,66,27 shares in the company via open market transaction.
12:30 p.m.: The selling pressure visible across sectors. All the sectoral indices trade lower.
12:26 p.m.: Metal stocks were also facing selling pressure. The BSE metal index was down 1.92 per cent; Vedanta, JSW Steel, Hindalco, SAIL, Tata Steel, NALCO and JSW Steel were among the losers.
12:17 p.m.: Banking stocks were among the worst hit in trades so far. The Bank Nifty fell 1.83 per cent; ICICI Bank was the among the top Nifty losers, down 4 per cent at Rs 229. Bank of Baroda, Bank of India, State Bank of India, Punjab National Bank, Canara Bank and Yes Bank were also among the losers, down 2.5-3.4 per cent each.
12:04 p.m.: The stock markets extended losses on the back of broad-based selling pressure. The Sensex was down 359 points at 25,040 and Nifty slumped 106 points to 7,653.
12:00 p.m.: From the Nifty-50 basket of stocks, 43 were declining while 7 were advancing. Adani Ports was the top Nifty loser, down 4 per cent to Rs 233. ICICI Bank, Bank of Baroda, Bharti Airtel, State Bank of India, Coal India and Zee Entertainment were also among the losers.
11:54 a.m.: The market breadth remains negative as 1,334 stocks decline while 791 advance.
11.42 a.m.: Markets turn extremely volatile with selling pressure coming from across the sectors. Sensex down 256 points, Nifty at 7,681.
11.35 a.m.: ICICI Bank, SBI, Bank of Baroda are among the top five losers in Nifty, down between 2.5-3.3 per cent.
11.30 a.m.: Bank Nifty, NSE's sub-index for banking shares down 1.8 per cent putting pressure on the broader indices.
11.24 a.m.: The Indian rupee is off day's high, trades 4 paise lower at 66.16 per dollar against day high of 66.08.
11.18 a.m.: Markets continue to remain under pressure. Sensex down 193 points at 25,206.58 and the Nifty hovers around 7,700 level, down over 60 points.
11:07 a.m.: The Sensex was down 171 points at 25,228 and Nifty fell 53 points to 7,705 after Reserve Bank of India cut interest rates by 25 basis points. Analysts were expecting a bigger rate cut than 25 basis points to spur growth in the economy.
10:55 a.m.: Stock markets remain weak ahead of RBI's monetary policy review; Sensex down 137 points and Nifty trades below 7,750.
10:46 a.m.: The market breadth was negative as 1,142 stocks were declining while 751 were advancing.
10:32 a.m.: The interest rate sensitive stocks were witnessing selling pressure. Realty, auto, capital goods and banking indices were down 0.6-1.34 per cent each.
10:28 a.m.: Banking stocks were witnessing selling pressure ahead of Reserve Bank of India's monetary policy review. The Bank Nifty was down 0.46 per cent or 75 points at 16,116; Bank of Baroda, Canara Bank, Kotak Mahindra Bank, ICICI Bank, Yes Bank, Bank of India, HDFC Bank, State Bank of India and IndusInd Bank were among the laggards, down 1.3-1.5 per cent each.
10:21 a.m.: The stock markets continue to witness selling pressure. The Sensex was down 151 points at 25,248 and Nifty fell 47 points to 7,711.
10.14 a.m.: Biocon extends gains for the fourth day in a row. The stock is up over 7 per cent at Rs 526.70. Morgan Stanley has upgraded Biocon to "overweight" with a target price of Rs 622 per share, indicating a potential upside of 26 per cent from yesterday's closing price. The brokerage says in a bull case scenario the stock can touch Rs 759. (See brokerage report)
10:05 a.m.: The stock markets continue to witness selling pressure. The Sensex was down 112 points at 25,287 and Nifty fell 35 points to 7,723.
10:01 a.m.: Market movement to be largely dependent on what happens in international markets and foreign fund flows rather than on domestic macros, says Nischal Maheshwari, head - institutional equities with Edelweiss Securities.
9:45 a.m.: Credit Suisse downgrades Container Corporation of India to neutral from outperform for target price of Rs 1,350. It says near-term weakness is likely to continue and high valuation would hold back performance.(Click here for more brokerage calls)
9:36 a.m.: JP Associates was the top gainer from the mid-cap space, down 2 per cent to Rs 8.19. Adani Power, Zee Entertainment, Neyveli Lignite, Glenmark, LIC Housing Finance, GMR Infra and Oberoi Realty were also among the losers, down 1-2 per cent each.
9:25 a.m.: The Sensex fell over 150 points and Nifty moved below its crucial psychological level of 7,750 on the back of broad-based selling pressure ahead of Reserve Bank of India's monetary policy review.
Selling pressure was visible across the board with realty, auto, metal, banking, FMCG and IT indices falling between 0.4-1 per cent each.
From the Nifty-50 basket of stocks, 39 were declining while 11 were advancing.
Bharti Airtel was the top Nifty loser, down 1.74 per cent to Rs 342. Adani Ports, ICICI Bank, Tata Motors, Tata Power, Mahindra & Mahindra, Aurobindo Pharma, Idea Cellular, Infosys, ONGC and GAIL India were also among the losers.
On the other hand, shares of oil marketing companies such as BPCL, HPCL and Indian Oil were trading 1.4-2 per cent higher after petrol price was on Monday raised by Rs 2.19 per litre while diesel rate was increased by 98 paise per litre.
Lupin, HCL Technologies, Dr Reddy's Labs, HUL and HDFC were among the notable gainers in the Nifty.
The broader markets were also witnessing some selling pressure. The BSE mid-cap index was down 0.13 per cent and the small-cap index fell 0.26 per cent.
8:10 a.m.: Sensex and Nifty are set to open lower ahead of Reserve Bank of India's monetary policy review on the back of weak trading of Nifty futures on the Singapore Stock Exchange amid negative global cues.
The Singapore Nifty or SGX Nifty was down 0.82 per cent or 63 points at 7,722.
Meanwhile, other Asian markets slipped in early trade on Tuesday, pressured by losses on Wall Street against a backdrop of slumping crude oil prices and mixed messages on the outlook for US monetary policy.
Japan's Nikkei slumped 2.2 per cent, Hong Kong's Hang Seng fell 1.35 per cent and China's Shanghai Composite was down 0.02 per cent.
Overnight, US stocks ended weaker on Monday, pulling back from a recent rally that took them to new 2016 highs, as losses in commodity-related and industrial shares offset gains in healthcare.
The Dow Jones industrial average closed down 55.75 points, or 0.31 per cent, to 17,737, the S&P 500 lost 6.65 points, or 0.32 per cent, to 2,066.13 and the Nasdaq Composite dropped 22.75 points, or 0.46 per cent, to 4,891.80.
Back home, foreign institutional investors bought shares worth Rs 236.82 crore while domestic institutional investors sold shares worth Rs 333.74 crore on Monday.
Meanwhile, the Reserve Bank of India (RBI) is expected to cut its policy interest rate by 25 basis points later in the day, lowering it to a more than five-year low while dangling the prospect of another cut later this year if inflation trends stay benign.
Most analysts polled by Reuters expect the RBI to cut the repo rate to 6.50 percent - the lowest since January 2011.
The RBI is also expected to say that it is retaining its "accommodative" stance, raising the prospect of another 25 bps rate cut later this year.
(With inputs from Reuters)