In one of the most vicious sell-offs in Indian markets, the benchmark Sensex today crashed by 1,408 points, or 7.41 per cent, to 17,605.35, its biggest single-day point fall on a closing basis as fears of US recession and disappointment about a bailout plan roiled global stock markets.

Dalal Street was flooded with sell orders, sending stocks down by five to 15 per cent. The market came off the lower level after trading was halted briefly twice due to technical glitches after the steep fall.

At one stage, the Sensex had plunged 2062.22 points, the biggest intra-day fall in the widely tracked index ever. Investors wealth — or market capitalisation — fell by a huge Rs 6,67,000 crore to Rs 59.59 lakh crore in a single day.

The slide for the sixth straight day prompted the government to caution investors against market rumours, while blaming global uncertainties for the fall.

“Orderly growth of the capital market is a priority of the government. I want to assure the citizens of India that sustained growth of the market is a priority,” Prime Minister Manmohan Singh told reporters in New Delhi. Fundamentals of the Indian economy remain strong, he said.

Reserve Bank governor Y V Reddy said in Mumbai that global financial markets have become far more uncertain than before and the RBI will consider a possible slowdown in the US economy while reviewing its monetary policy.

The sharp fall was triggered by setback in global markets, selling by foreign institutional investors, mega IPOs and margin calls after a proposed US stimulus package failed to soothe fears that the US will tip into recession.

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