The Sensex and the Nifty took cues from the sharp fall in US equities on Friday following Bullard's comments.
Banking stocks were once again at the receiving end following the RBI move to hike rates. ICICI Bank was down 2.64 per cent, HDFC Bank was down 2.7 per cent, Axis Bank 2.5 per cent and Yes Bank 2 per cent in early trade.
Other Nifty stocks that fell apart from the banking stocks were Jaiprakash Associates, NTPC, BPCL and Dr Reddy's Labs.
Nifty stocks that gained in trade was Ranbaxy Labs, Reliance Infra and HCL Tech. Hindustan Unilever which was hammered in trade on Friday gained ground today.
IT stocks were having a good day in trade with gainers from the space including Infosys, TCS and Wipro.
Mid cap stocks were also trading higher with the mid cap index gaining marginal ground. Among the winners from the space were Hexaware, Opto Circuits, Steel Authority and Tech Mahindra.
Meanwhile, Asian markets were trading mixed with the Shanghai Composite, Seoul Composite higher and the Jakarta Composite trading lower.