Equity benchmark indices tanked in late morning trade on Thursday pulled down by bank stocks, after the Reserve Bank of India's monetary policy decision.
Erasing all its early gains, the 30-share BSE Sensex fell by 746.62 points to 71,405.38. The Nifty declined 220.95 points to 21,709.55.
The Reserve Bank of India on Thursday decided to keep the key policy rate unchanged for the sixth time in a row as it maintains a tight vigil on inflation.
Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das on Thursday said the Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 per cent.
Among the Sensex firms, Axis Bank, Nestle, ICICI Bank, ITC, Maruti, Kotak Mahindra Bank, Bajaj Finance and Asian Paints were the major laggards.
PowerGrid defied the broader market trend and jumped nearly 5 per cent after the company posted a 10.5 per cent rise in consolidated net profit to Rs 4,028.25 crore in the December quarter, mainly on the back of higher revenues.
State Bank of India, HCL Technologies and Tata Consultancy Services were the other gainers.
In Asian markets, Seoul, Tokyo and Shanghai were trading in the positive territory while Hong Kong quoted lower.
The US markets ended with gains on Wednesday.
Global oil benchmark Brent crude climbed 0.28 per cent to USD 79.43 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,691.02 crore on Wednesday, according to exchange data.
The BSE benchmark declined 34.09 points or 0.05 per cent to settle at 72,152 on Wednesday. The Nifty ended marginally up by 1.10 points or 0.01 per cent to 21,930.50.