At 11:29 IST, the barometer index, the S&P BSE Sensex, was down 544.37 points or 0.94% to 57,445.53. The Nifty 50 index lost 168.40 points or 0.98% to 16,931.65.

In the broader market, the S&P BSE Mid-Cap index fell 1.31% while the S&P BSE Small-Cap index slipped 0.87%.

The market breadth was weak. On the BSE, 1,058 shares rose and 2,285 shares fell. A total of 147 shares were unchanged.

Investors are cautious ahead of the US Federal Reserve's meeting outcome later this week, to see how the central bank will proceed in its fight against inflation in light of the shakeup in the banking sector.

Buzzing Index:

The Nifty PSU Bank index slipped 1.77% to 3,616.65. The index advanced 1.40% in previous two trading sessions.

Bank of Maharashtra (down 3.78%), UCO Bank (down 2.41%), Indian Overseas Bank (down 2.17%), Punjab & Sind Bank (down 2.13%), Bank of India (down 2.08%), Punjab National Bank (down 1.88%), Canara Bank (down 1.74%), State Bank of India (down 1.74%), Central Bank of India (down 1.64%) and Union Bank of India (down 1.47%) declined.

Stocks in Spotlight:

Rail Vikas Nigam (RVNL) rose 1.97% after the company said that it emerged as the lowest bidder (L1) for composite contract package in connection with new BG Railway Line of Haryana Orbital Rail Corporation (HORC) project. The cost of the project is Rs 1,088.49 crore and it is expected to be executed within 1,460 days.

SKF India added 0.43%. The company said that it has signed share purchase agreement with Clean Max Enviro Energy Solutions to acquire 2,600 equity share capital of Cleanmax Taiyo.

HDFC Bank fell 0.76% and HDFC declined 0.24%. HDFC Bank announced that the National Company Law Tribunal (NCLT) on Friday approved the proposed merger scheme of Housing Development Finance Corporation (HDFC) with the bank. HDFC had announced its merger with HDFC Bank on 4 April 2022. According to the merger scheme, HDFC Bank will become 100% owned by public shareholders and existing shareholders of HDFC will own 41% of HDFC Bank.

Global Markets:

Asian stocks declined across the board on Monday after UBS agreed to buy its banking rival Credit Suisse in a $3.2 billion takeover over the weekend.

The People's Bank of China left the loan prime rates for 1-year and 5-year unchanged, after cutting the reserve requirement ratio for almost all banks by 0.25 percentage points last week. The 1-year LPR stayed at 3.65% while the 5-year LPR remained at 4.3%, both unchanged since August last year.

UBS Group AG, Switzerland's largest banking group, has agreed to acquire the crisis-hit Credit Suisse Group AG in a $3.23-billion deal. Swiss regulators played a key role in facilitating the deal in an effort to quell a contagion threatening the banking sector. Under the deal, Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares. The combined bank will have $5 trillion of invested assets, according to UBS.

Wall Street closed lower on Friday as investors pulled back from positions in bank shares amid lingering concerns over the state of the U.S. banking sector.