Mumbai, May 3 (IANS) Indian equities markets were caught in a selling spree as traders off-loaded interest rate-sensitive stocks like banking and auto after the Reserve Bank of India (RBI) hiked key interest rates and said inflation could be high in the short-run and growth could slow down in the current fiscal.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 18,979.31 points, was ruling at 18,654.17 points, down 349.24 points or 1.84 percent from its previous close at 18,998.02 points.

The 50-scrip S&P CNX Nifty of the National Stock Exchange was also trading lacklustre at 5,689.7 points, down 1.91 percent.

The Reserve Bank of India (RBI) hiked its short-term lending rates by 50 basis points to tame inflation and said the borrowing rate will henceforth remain 100 basis points below it in a major policy decision.

The savings bank deposit interest rate was increased from the present 3.5 percent to 4 percent with immediate effect.

Among the top losers were auto, banking and realty stocks. All 13 sectoral indices on the BSE were in the red.

Broader markets were also facing selling pressure with the BSE midcap index 1.37 percent down and the BSE small cap index down a similar 1.36 percent.

The market breadth was negative with 721 stocks advancing, 1,919 on the decline and 106 remaining unchanged.

Major losers on the Sensex were M&M, Tata Motors, SBI, Bajaj Auto and ICICI Bank.