The benchmark Sensex plunged by over 450 points at the midsession on Thursday on panic selling by investors and funds after overseas markets fell sharply due to deepening recession fears.
The Bombay Stock Exchange barometer fell by 457.39 points to 8,316.39 at 1330 hrs with stocks of realty, banking and metal segments recording major losses.
The wide-based National Stock Exchange's Nifty dipped by 132.10 points to 2,502.90.
Selling pressure picked up after the Japan's stock market fell below 8,000 points level, after the US stocks closed at five-year low levels overnight.
In New York, the Dow Jones Industrial Average sank to the lowest since March 2003 as consumer prices and housing starts plunged and the chances for a US automaker bailout package dwindled, heightening concerns for a protracted recession.