Mumbai, Sep 29 (IANS): Panic selling was witnessed just ahead of the crucial bi-monthly monetary policy review of the central bank, which led a barometer index of Indian equities to shed 289 points or 1.13 percent during the pre-noon session on Tuesday.

Investor sentiment was subdued on the back of possibility of a slowdown in monetary easing by the central bank, due to the waning of base effect that could negate the rise of inflation further.

The Reserve Bank of India's (RBI) is expect to give a decision on whether or not to cut key lending rates and give its forecast on the trajectory of the economy, inflation and growth estimates.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) had plunged by 246.66 points or 0.95 percent on Monday (Sep 28).

On Tuesday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) also traded deep in the red. It shed by 87.35 points or 1.12 percent at 7,708.35 points.

The S&P BSE Sensex, which opened at 25,496.38 points, was trading at 25,327.83 points (at 10.55 a.m.) -- 289.01 points or 1.13 percent down from the previous day's close at 25,616.84 points.

The Sensex touched a high of 25,496.38 points and a low of 25,287.33 points in the intra-day trade so far.