The Sensex and the Nifty opened the day flat ahead of the Reserve Bank of India's (RBI) Monetary policy, but came under severe selling pressure after a few minutes of trade.
HDFC Bank, Yes Bank and IndusInd Bank were among the major losers in trade. PSU banking stocks also lost ground with stocks like Canara Bank and Yes Bank among the losers.
Sun Pharma which had fallen by 10 per cent in trade recovered lost ground and was trading marginally higher.
Hero Motor Corp was trading lower by 2 per cent and Tata Power down by 2 per cent were the top losers from the Nifty.
The rupee meanwhile opened steady ahead of the RBI's policy. The currency was trading at 63.48 to the dollar.
Apart from the RBI Monetary Policy, the focus would also be on Greece. Yesterday, the leaders of Germany, France, the International Monetary Fund, the European Central Bank agreed for closer coordination with Greece ahead of the Monetary Policy.