The S&P BSE Sensex slipped over 200 points on Monday to close marginally above its crucial psychological support placed at 35,000 while the Nifty50 reversed gains after hitting a high of 10,770 to end above 10,600 levels.

A large part of the fall was led by banking pack which came under pressure on expectations of a rate hike in the June policy meeting. The outcome of the policy meeting will be announced on 6 June.

An RBI staff study showed every 100 bps increase in borrowing costs lowers the investment rate by as much as 91 bps.

A Reuters poll before the January-March growth data showed that 40 percent of nearly 60 respondents saw a rate hike on Wednesday, while nearly 70 percent of 44 projected that in August - a sharp contrast to an April survey seeing an increase only in 2019's second half.

The anticipated increase could put a dent in growth, which has recovered after blows from the November 2016 demonetisation, the report added. The key concern of the central bank, which has long kept the repo rate at 6 percent, is the inflation rate, which is widely expected to climb further.

Nifty Bank lost 435 points or 1.63 percent to close at 26,257.55 weighed down by losses in Bank of Baroda, IDFC Bank, HDFC Bank, Federal Bank, SBI, Kotak Mahindra and ICICI Bank.

The S&P BSE Sensex closed 215.37 points lower at 35,011.89 while the Nifty5o ended 67.70 points down at 10,628.50.

On the sectoral front, the S&P BSE IT index rose 0.43 percent, followed by the S&P BSE metal index which gained 0.23 percent.

The S&P BSE Realty index slipped 3.2 percent, followed by the S&P BSE Power index which was down 2.3 percent, and the S&P BSE Telecom index closed 1.95 percent lower.

The S&P BSE Midcap index slipped 2 percent, while the S&P BSE Midcap index closed 0.82 percent down.

Top Sensex gainers include names like Dr Reddy’s Laboratories (up 2.8 percent), Infosys (up 1.5 percent), M&M (up 1.4 percent), Tata Steel (up 1.1 percent), and TCS (up 0.7 percent).

Top Sensex losers include names like HDFC Bank (down 2.9 percent), Bharti Airtel (down 2.8 percent), Adani Ports (down 2.4 percent), Power Grid (down 2.06 percent), and HUL (down 1.7 percent).