The Sensex on Tuesday fell over 400 points during the early trade session as investors reacted to the lower-than-expected GDP growth rate numbers released on Friday.
Indian 'VIX' or the volatility index -- market's expectation of volatility over the near term -- shot up by 7 per cent to 17.41.
Except for the export-oriented IT stocks, all other Nifty sectoral index traded lower.
At 9.32 a.m., the Sensex was down 402 points at 36,930.66. The benchmark Sensex opened at 37,181.76 from its previous close of 37,332.79.
The broader Nifty was down 108.05 points or 0.98 per cent lower at 10,915.20.
HDFC, ICICI Bank, HDFC Bank and Reliance Industries were the stocks that fell the most on the Sensex.
India's GDP growth rate fell to a six-year low of 5 per cent for the April-June quarter. This is the slowest the economy has grown since 2013. Industrial production too, grew by a meagre 2.1% for the month of July 2019. Its cumulative growth during April to July, 2019-20 was 3%, as per data released by the government on Monday. These eight sectors, which are coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity grew by 7.3% in July 2018.
Apart from this, FM Nirmala Sitharaman announced a slew of mega bank mergers on Friday.
Punjab National Bank (PNB), Oriental Bank of Commerce, United Bank of India have been merged into one. Canara Bank and Syndicate bank were merged to create the fourth largest PSB in India. The third merger was announced between Andhra bank, Union Bank of India (UBI) and Corporate Bank and finally, Indian Bank has been merged with Allahabad bank.
Car sales too, came as a dampener with major players reporting significant decline in their sales.
Tata Motors reported a 49 per cent slump in its domestic sales on a year-on-year (YoY) basis at 29,140 units, which is the lowest in over a decade.
Maruti Suzuki India reported a 32.7 per cent decline in its vehicle sales in August and domestic sales fell nearly 36 per cent to 94,728 automobiles.