The Indian equity benchmarks were on track to close lower for second straight session weighed down by weakness in information technology, financial services and private sector banking shares amid weak global cues. The Sensex fell over 500 points and Nifty 50 index briefly dropped below its important psychological level of 14,700. Hindustan Unilever, ICICI Bank, HDFC, Reliance Industries, Kotak Mahindra Bank and Tata Consultancy Services (TCS) were among the top drags on the Sensex.
As of 12:29 pm, the Sensex fell 307 points to 48,855 and Nifty 50 index declined 94 points to 14,757.
Broader Asian markets extended a sell-off fueled by concerns that a potential pickup in US inflation could lead to interest rate hikes sooner than expected.
Meanwhile, eight of 11 sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty IT index's over 1 per cent decline. Nifty Bank, Financial Services and Private Bank indexes also fell around 1 per cent each.
On the other hand, index of state-run lenders jumped 4 per cent and index of public sector enterprises - CPSE index climbed 2 per cent.
SBI Life was top Nifty loser, the stock fell nearly 3 per cent to Rs 974. Hindustan Unilever, Mahindra & Mahindra, Shree Cements, Tech Mahindra, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Grasim Industries, ICICI Bank, TCS, Nestle India, Wipro, HDFC and JSW Steel also fell between 1-3 per cent.
On the flipside, Tata Motors, Power Grid, NTPC, Larsen & Toubro, State Bank of India, UPL, Britannia and Asian Paints were among the gainers.
The overall market breadth was positive as 1,579 shares were advancing while 1,302 were declining on the BSE.