MARKET LIVE: Sensex down 400 pts, India VIX jumps 8%; PSBs, autos decline

Benchmark indices were trading with over a per cent cut each in Tuesday's early morning trade.

Stocks of public sector banks dipped after the government on Friday unveiled a plan to merge 10 PSBs into four, reducing the number of state-owned banks from 18 to 12.  Auto stocks also were under pressure after monthly sales report showed that sales of four- and two-wheelers almost halved in August, compared to the equivalent month last year.

The S&P BSE Sensex was trading 400 points lower at 37,020 levels. Tata Motors, Mahindra & Mahindra, Tata Steel, ONGC, and ICICI Bank were the top laggards in the Sensex pack. The broader Nifty50 index gave up the 11,000-level to hover around 10,930 levels, down 96 points, or 0.87 per cent.

All the Nifty sectoral indices, except Nifty IT, were trading in the red. Nifty PSU Bank, down over 2 per cent, took the deepest cut.

In the broader market, the S&P BSE MidCap index was down 120 points, or 0.9 per cent, to 13,350 levels, and the S&P BSE SmallCap was hovering around 12,480 levels, own 51 points, or 0.4 per cent.