Joining an Asian sell-off, Dalal Street plunged for the fourth day in a row, and closed 1.4 per cent lower in volatile trade on Thursday to its lowest close in nearly 8 weeks. The sentiment was hit after Asian shares fell for a third successive day earlier following heavy overnight falls on Wall Street, as risk appetite was sapped by further concerns over the pace of a US economic recovery.

With foreign funds selling heavily, the BSE Sensex closed 230.77 points lower at 16,052.72. The 50-share NSE index closed down 1.57 per cent at 4,750.55. With this, the Sensex has shed over 4 per cent so far in the week, and is down over 6 per cent this month, on concerns over the speed of recovery, and as the RBI set a hawkish tone at its policy review this week.

FIIs pulled out a record Rs 2,546 crore (around $ 541 million) from Indian markets on Thursday. World stocks hit a three-week low as European corporate results disappointed and weak US data rekindled worries about the strength of the economic recovery. Trade was volatile as monthly derivatives contracts expired. The Sensex slipped below the 16,000 mark in early deals, for the first time since September 7.

Among other markets, Tokyo shed 1.83 per cent while Sydney saw its biggest one-day fall in four months as the S&P/ASX 200 closed 2.36 per cent lower. Hong Kong plummeted 2.42 per cent and Shanghai slid 2.10 per cent on worries over liquidity on the eve of the launch of the Nasdaq-style ChiNext board in China. Seoul drifted 1.48 per cent lower and Taiwan dropped 2.37 per cent.

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