The benchmark Sensex, amid signs of nervousness encompassing several other Asian market peers, started off on a weak note Monday, and immediately plunged below the psychological 26,000-mark, dropping nearly 250 points to touch a low of 25,972.54.
Early weakness in the market comes on the back of a major relief rally on Friday after investors resorted to short-covering following the US Fed's decision to keep the interest rates unchanged.
However, the optimism proved to be shortlived and investors dumped metals, banking and realty shares, as the sluggish global economic growth led by deceleration in Chinese economy coupled with slow-paced reforms back home prompted investors to exercise caution.
At 10.05 am, the 30-share BSE S&P Sensex was at 26,045.57, down 173.34 points, or 0.7 percent from the previous close. The broader 50-stock CNX Nifty was at 7,931.30, down 50.60 points, or 0.6 percent.
Despite the early fall, the market breadth was marginally weak with 784 stocks declining against 768 advances on the BSE.
Across Asia, Japan's Nikkei fell nearly 2 percent to 18,070.21, even as Chinese indices exhibited a mixed trend. While Hang Seng lost 1.3 percent to 21,640.50, Shanghai Composite was up 0.7 percent at 3,118.81 in early trade.
"Now they are worried that “not hiking the rates could be due to worsening global deflationary pressures. This is the beauty of stock markets – the same factor can explain movement of stock markets in both directions," G Chokkalingam, founder & managing director, Equinomics Research & Advisory, said in his morning note.
Early laggards in the Sensex space such as Hindalco shed nearly 2 percent to Rs 74.65, HDFC dropped 1.7 percent to Rs 1,189.95, Tata Steel also lost 1.7 percent to Rs 224.70, M&M eased 1.5 percent to Rs 1,183.95 and Reliance Industries was down 1.3 percent at Rs 883.55.
Other losers ITC, NTPC, Dr Reddy's, Bharti Airtel, Coal India and SBI were down around a percent each.
Updated Date: Sep 21, 2015 10:18:31 IST