After a flat opening, the markets wilted under selling pressure in late morning trades following Japan's credit rating downgrade by Moody's, citing the country's large budget deficit.
The Sensex languished in the red for most part of the day, dropping, 242 points to touch a low of 16,256 towards the close.
The index finally ended with a 213 points loss at 16,284.
Nifty ended down 60 points at 4,888.
Asian markets also reeled under selling pressure after erasing morning gains post Moody's downgrade of Japan. Hang Seng dropped 2%, while the Nikkei, Straits Times and Seoul Composite shed 1% each. In Europe, however, CAC 40 and DAX were up around 0.5-1% each.
Global investors will be looking towards the Federal Reserve's
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