Investors also tracked weak global cues after passage of the Hong Kong pro-democracy bill in Washington that could derail trade talks between the United States and China.
At 12 noon, the BSE S&P Sensex was down by 417 points or 1.01 per cent to 40,713 while the Nifty 50 tumbled down by 121 points at 12,030.
All sectoral indices at the National Stock Exchange were in the red with Nifty metal down by 1.6 per cent, auto by 1.2 per cent, FMCG by 1 per cent and PSU bank by 0.9 per cent.
Among stocks, Hindalco lost by 3.3 per cent, Tata Steel by 2.2 per cent, Vedanta by 1.9 per cent and Maruti Suzuki by 1.5 per cent. Index heavyweight Reliance Industries slipped by 1.5 per cent to Rs 1,556.25 per share.
The other prominent losers were Hindustan Lever, Britannia, Asian Paints, State Bank of India and Dr Reddy's.
However, Bharti Infratel continued to climb up and added gains of 5.9 per cent at Rs 271.95 per share while Bharti Airtel was up by 1.3 per cent. Adani Ports, utility major NTPC and Bharat Petroleum Corporation were also in the green.
Meanwhile, Asian markets slipped as investors turned cautious, fearing a new US law backing Hong Kong protesters could put hurdles in efforts to end the US-China trade conflict.
MSCI's broadest index of Asia Pacific shares outside Japan fell by 0.9 per cent. Hong Kong led the losses, dropping by 2 per cent while South Korean shares lost by 1.2 per cent and Japan's Nikkei eased by 0.1 per cent.