In the Nifty 50 basket of shares 38 were declining while 12 were advancing.

The S&P BSE Sensex and NSE Nifty 50 Indexes extended losses on the back of selling pressure in banking heavyweights like ICICI Bank, HDFC Bank, HDFC, Kotak Mahindra Bank and State Bank of India. Meanwhile, select bluechip capital goods, FMCG and Information Technology shares were also seen exerting pressure on the benchmarks. The Sensex fell as much as 297 points to intraday low of 39,653.59 and the NSE Nifty 50 Index dropped 89 points to 11,876.85.

As of 12:02 pm, the Sensex fell 0.64 per cent or 257 points to 39,693 and the NSE Nifty 50 Index dropped 0.63 per cent or 75 points to 11,890.

Fourteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Capital Goods Index's 1 per cent decline. Bankex, Auto, Finance, Information Technology, FMCG, Telecom and Realty sector gauges also fell between 0.5 and 1 per cent each.

On the other hand, S&P BSE Metal Index was top gainer, up 0.8 per cent.

Mid- and small-cap shares were also witnessing selling pressure as the S&P BSE MidCap Index declined 0.5 per cent and the S&P BSE SmallCap Index fell 0.25 per cent.

In the Nifty 50 basket of shares 38 were declining while 12 were advancing.

Indiabulls Housing Finance was top loser in the Nifty 50 basket of shares, the stock fell 6.5 per cent to Rs 630.85. Indiabulls Housing Finance shares fell for second day in a row after a plea was filed in the Supreme Court on Monday seeking legal action against Indiabulls Housing Finance Limited (IHFL), its chairman and directors for alleged misappropriation of Rs. 98,000 crore of public money.

Yes Bank, Bharti Infratel, Bajaj Auto, tech Mahindra, Hero MotoCorp, Kotak Mahindra Bank, Power Grid, UPL, ICICI Bank and HCL Technologies were also among the losers.

On the flipside, Tata Steel, GAIL, Vedanta, Sun Pharma, Cipla, ONGC, Reliance Industries Indian Oil and Asian Paints were among the gainers.