Mumbai, Indian stock markets erased all their initial gains on Friday afternoon, with the BSE Sensex trading over 250 points lower, although the Reserve Bank of India (RBI) announced an emergency rate cut of 75 basis points.

The 30-stock Sensex tumbled after gaining over 1,100 during the initial trade.

The RBI Governor's grave concern over the global economy and a likely slowdown in India appeared to have dampened the initial euphoria in the market.

At 12.50 p.m., Sensex was trading at 29,692.03, lower by 254.74 points or 0.85 per cent from the previous close 29,946.77.

It had opened at 30,747.81 and touched an intra-day high of 31,126.03. So far, it has touched a low of 29,360.69 points.

The Nifty50 on the National Stock Exchange was trading at 8,627.95 lower by 13.50 points or 0.16 per cent from its previous close.

On the Sensex, Axis Bank, State Bank of India and NTPC gained the most so far, while Bharti Airtel, IndusInd Bank and Maruti Suzuki lost the most.

In a much anticipated move, amidst the novel coronavirus pandemic, RBI Governor Shaktikanta Das announced a 75 bps cut in repo rate to 4.4 per cent.

He, however, noted that that there is high probability of parts of the global economy slipping into a recession.

"Expectations of a shallow recovery in 2020 from 2019's decade low in global growth have been dashed," Das said.

"The outlook is now heavily contingent upon the intensity, spread and duration of the pandemic. There is a rising probability that large parts of the global economy will slip into recession."