The Sensex saw one of its biggest fall in 7 years and the third largest fall in its history, as global markets sank on fears that the global growth engine (China) was slowing down.
It was bloodbath from start to end with any recovery being swiftly sold into. Dealers say that Foreign Portfolio Investors sold heavily and there was basket selling across the board.
The fall was triggered by China, which opened lower and closed lower by 8.5 per cent, its biggest slide since 2008. Other Asian markets were swift to react with Hang Sang, Taiwan Weighted and the Japanese Nikkei all down between 3-6 per cent each.
Dow Futures pointed to a lower opening, which further accelerated selling pressure in the Indian markets in the last one hour of trade.
The Sensex closed the day lower by 1,624 points, while the Nifty dropped 490 points. The Sensex closed below the 26,000 points mark.
Almost all of the mid caps ended the day in the red. Dealers say there maybe more carnage to come in the coming days and investors should not trying to catch a falling knife.