The stock markets pared their early losses but were still trading sharply lower during morning trade on Tuesday as the crisis in financial markets deepened, taking a heavy toll on the global equity markets.
After falling by nearly 480 points in early trade, the Bombay Stock Exchange 30-share index slumped by 233.85 points to 13,297.42 at 1045 hrs.
The National Stock Exchange's index Nifty, which fell by 153.55 points in early trade, was quoted at 3,979.70, down by 93.20 points.
A meltdown in global markets had a devastating impact on Indian bourses for the second consecutive day, brokers said.
All Asian indices were down by about 1.0 per cent to 6.0 per cent during morning trade today after the US market tumbled by 4.4 per cent, the biggest single session fall after the 9/11 terror strike.
Markets in Hong Kong, Japan, China and South Korea, which were closed yesterday for a public holiday, registered huge losses in early trade.
Brokers said the sell-out of the Merrill Lynch, which has fairly wide presence in India, as well as the bankruptcy of the US fourth largest bank Lehman Brothers hurt the market sentiments here.
Realty and metal stocks remained under pressure and recorded sharp losses.