After a higher start at 19,322.28, the Sensex fell sharply by 124.38 poins to 19,028.03 at 1300 hrs as stocks of bank, oil and gas and metal sector declined.
The broad-based Natonal Stock Exchange index NSE Nifty fell by 40.50 points to 5,756.40, after climbing to 5,849.90 at the outset.
Brokers said the budgetary proposals lacked any worthwhile market moving announcement and remained under pressure as some corporates and individual taxes were raised.
They said the tumbling market received little support on lowering of Securities Transaction Tax (STT) on equity futures to 0.01 per cent from 0.17 per cent.
The market even ignored the firming global markets after an overnight rise in the US stocks, they added.