The benchmark index plunged further in the noon trade after Asian stock extended losses following record overnight losses on Wall Street and dismal numbers of the US economy.

The Sensex is down 320 points at 8,519 while Nifty has fallen by 94 points to 2,588.

The selling pressure on the BSE is being seen across the sectors. Banking, realty and metal stocks are among the major losers.

Among the Sensex stocks, M&M and Sterlite are down over 8 per cent. Maruti, HDFC and DLF are among the other major losers. Sensex heavyweight RIL is down over 4.5 per cent.

In Asian markets, Japan’s Nikkei 225 stock average shed 6.35 per cent, and Hong Kong's Hang Seng index lost 4.94 per cent.

Then the National Bureau of Economic Research, considered the arbiter of when the economy is in recession or expanding, said the U.S. recession had begun a year ago, in December 2007.

Global markets had rallied last week, but any nascent investor confidence quickly wilted after grim U.S. economic data sent the Dow Jones industrial average plummeting nearly 700 points — or 7.7 per cent — on Monday, wiping out more than half of last week's big gains.

"A string of weak economic data really depressed sentiment," said Yutaka Miura, a senior strategist at Shinko Securities in Tokyo. "Investors are becoming more pessimistic over the state of the global economy."

Australia's central bank slashed its key interest rate Monday a full percentage point to 4.25 per cent as it tries to prevent the economy from contracting. Australia's S&P/ASX 200 index was down 4.2 per cent.

Markets in the Philippines, Taiwan and South Korea also dropped.

Among major regional markets, only Thailand is trading in the green.

U.S. stocks first slid on initial reports that the first weekend of the holiday shopping season, while better than some retailers and analysts feared, saw only modest gains. Downbeat reports on the manufacturing sector and construction spending further unnerved investors.