Mumbai, May 3 (IANS): A benchmark index for Indian equities markets nosedived Tuesday after the central bank said it would hike key interest rates to contain inflation.

Banking stocks were among the top losers after the Reserve Bank also hiked the savings bank deposit rates.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 18,979.31 points, was ruling at 18,778.9 points, down 216.8 points or 1.14 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 5,634.15 points, down 1.17 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.

In the banking space, top losers included heavyweight State Bank of India, and major private sector lenders ICICI Bank and HDFC Bank.

Broader markets were also facing selling pressure with the BSE midcap index 0.6 percent down and the BSE small cap index up 0.54 percent.

The market breadth was negative with 915 stocks advancing, 1,520 on the decline and 109 remaining unchanged.