Continuing the downward trend in the stock markets, Sensex plunged by over 500 points to below the 37,000-point mark during trading hours on Thursday.
The sharp fell was in line with global markets, which also fell on the back of the US Federal Reserve slashing the interest rates by 25 basis points, first since 2008, said it is "not the beginning of a long series of rate cuts".
Fed's hawkish comments amid a slowdown took the global investor by surprise and this resulted in a sell-off.
At 12.08 p.m., the Sensex was trading 468.06 points lower at 37,013.06. It hit an intra-day low of 36,976.97.
The Nifty also fell below the 11,000 mark and was trading at 10,925.70 as of 2 42pm.
Only 8 of the Nifty 50 stocks traded in the green. Among the top losers were Vedanta, Zee, Tata Motors, JSW Steel and Hindalco, which fell in the range of 3 to 5 per cent.
The gainers were Wipro, Infratel, Power Grid and Maruti Suzuki.
Meanwhile, Cafe Coffee Day shares hit lower circuit for the third day in a row since CCD founder V.G. Siddhartha mysteriously disappeared and was found dead on Wednesday.
The CCD shares stood at Rs 110.95 apiece.
The rupee also fell to a five-week low against the US dollar to 69.20 compared to Wednesdayâ€™s low of 68.79.
July saw a bloodbath in the stock markets, especially after the full budget was announced. The markets, which were expecting to see some considerable growth measures in the budget were left disappointed. As a result, little has been done to bring about the much-needed boost to the economy.
The tax on super rich levied by the government too, saw Foreign Portfolio investors pulling out.
However, experts of the opinion that investors should stay invested in the markets and are optimistic that the growth will come back. They believe that it will take another six months to a year before the markets begin to bounce back.