In its second bi-monthly policy review, the RBI cut interest rate by 0.25 per cent for the third time this year.
The 30-share index — which fell by over 347 points soon after RBI announced monetary policy — was down sharply by 642.11 points or 2.31 per cent to 27,206.88.
All the sectoral indices led by banking and realty, were trading in negative terrain.
The wide-based National Stock Exchange index Nifty dipped below the crucial 8,300-level by tumbling 177.70 points or 2.11 per cent to trade at 8,255.70.
RBI, meanwhile, left all other policy tools like cash reserve requirement unchanged at 4 per cent and Statutory Liquidity Ratio (SLR) at 21.5 per cent.
The RBI governor Raghuram Rajan lowered projections of the economic growth as measured by GVA (gross value added) to 7.6 per cent from 7.8 per cent estimated in April due to global factors and likely impact of below normal monsoon.
Sector-wise, the BSE realty index suffered the most by plunging 3.10 per cents, followed by bankex by 3.02 per cent.
PTI