The benchmark indices in the afternoon trade continued to decline sharply after the RBI as expected reduced repo rate by 25 basis points for the third-consecutive time to 5.75% from the earlier 6% and changed its policy stance to accommodative from neutral.
Indices recorded the biggest one-day fall of the year, with Sensex losing over 553.82 points or 1.38 %t to end at 39,529.72 and Nifty was dragged lower by 177.90 points or 1.48% to close at 11,843.80.
PSU Banks led the sharp fall in trade today with loss of as much as 5%. Other sectoral indices also ended the day with losses.
Among Nifty50 stocks, GAIL emerged as the biggest loser falling 12%. Other losers from the pack include stocks such as Indiabulls Housing, IndusInd Bank, Yes Bank and SBI that lost between 4-8%.
Stocks such as Coal India, Power Grid and HUL however gained in trade today by 1-2%.
Rupee also recovered from its day's low and was last trading higher at 69.285 per US dollar.