Stock markets went into a tailspin with the BSE benchmark Sensex losing over 430

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points to close below 16,000-level after three months, on furious selling across the counters.

Marketmen said selling pressure became intense after global stocks melted over concerns of global economic recovery.

Extending the losing streak for the second day in a row, the Bombay Stock Exchange benchmark Sensex plunged to 3-month low level of 15,790.93, down by 434.02 points or 2.68 per cent from its last close. The last time the barometer closed below 16,000-level was on November 4, 2009 at 15,912.13 points.

The 50-issue Nifty of the NSE also fell by a hefty 126.70 points or 2.61 per cent to 4,718.65.

Brokers said no counter escaped the fury of selling but reatly and metal shares bore the maximum brunt and their sectoral indices were down by a massive over 4 per cent each. PSU, oil&gas and bankex were under tremendous pressure too and lost over a hefty 3 per cent each.

They attributed aggressive selling to global markets going into a tizzy. Most of the Asian markets tumbled. Japanese benchmark Nikkei 225 plunged about 3 per cent, Hong Kong's Hang Seng nosedived 3.33 per cent and South Korea's Kospi Index dropped 3.05 per cent.

European shares began on a jittery note, with London Stock Exchange's benchmark FTSE 100 dropping over 1 per cent.

World stocks fell as investors were spooked by concerns over ballooning deficit of euro zone countries Greece and Portugal. Higher than expected number of people seeking unemployment benefits in the US and a crash in commodity and energy prices further dampened the sentiment.

The BSE Sensex fell more than 2 percent on Friday afternoon, as Europe's sovereign debt, indications of weak U.S. jobs data and a crash in commodity and energy prices raised fresh concerns over global economic recovery.

The domestic markets have also taken the brunt of selling by foreign funds, which had earlier invested in emerging markets after borrowing in cheaper dollars.

By 12:28 p.m. (0658 GMT) the 30-share BSE Index was down 2.46 percent or 400.62 points, to 15,826.35 points its lowest in three months, with only one component gaining.

Across-the-board selling was witnessed. Among the index stocks, heavyweight Reliance Industries led the losers and was down 2.4 percent at 994.60 rupees.

Bank stocks such as private lender ICICI Bank and State Bank of India (SBI) were also among the top losers. ICICI Bank was down 3.8 percent at 797.75 rupees, while larger rival SBI was down 3.1 percent at 1,888 rupees.

Among tech stocks, software bellwether Infosys Technologies was down 2.76 percent at 2,356.40 rupees, while larger rival Tata Consultancy fell 2.9 percent to 720.60 rupees.

Drug maker Ranbaxy Laboratories was down 5.23 percent at 404 rupees after The Economic Times newspaper reported that the U.S. drug regulator asked it to immediately assess whether its plants making drugs for the U.S. market met standards.

"What we are seeing is dollar-carry-trade unwinding by foreign investors," said Neeraj Dewan, director, Quantum Securities.

"They borrowed when the dollar was cheap and now that the dollar is recovering, they are unwinding," he added.

The U.S. dollar has surged after investor anxiety about sovereign debt in Greece, Portugal and Spain sparked a sell-off in the euro and growth-linked currencies such as the Australian dollar.

"Its a fall-out of that," said Naresh Kumar Garg, Chief Investment Officer at Sahara Mutual Fund.

He said rising inflation in India was also a worrying factor, especially food prices and how the government would tackle it.

Dewan said that the current trend of buying on dips and selling on slight rises in the domestic market would continue to determine market trend for the next week or two.

"There are some stocks which are still overvalued and we will continue to see selling there," he said.

In the broader market, losers led gainers 1,235 to 74 on a moderate volume of 370 million shares.

The 50-share NSE Index was trading down 2.6 percent at 4,719.65 points.

STOCKS ON THE MOVE

* Shares in cinema halls operator Fame India hit the upper circuit of 5 percent at 50.80 rupees after rival Inox Leisure said it bought 7.2 percent stake in Fame through a block deal.

* Shares in airline operator SpiceJet fell as much as 5.3 percent to 51.80 rupees after block deals in which more than 31 million shares changed hands. Sources told Reuters that Istithmar World Capital, the investment arm of Dubai World had sold its entire 13.4 percent holding in the Indian budget airline.

MAIN TOP 3 BY VOLUME

* SpiceJet on 38.8 million shares

* IFCI Ltd on 12.2 million shares

* Shree Ashtavinayak on 8.2 million shares

Markets @ 09.00 AM

The Bombay Stock Exchange benchmark Sensex today tanked 434 points in early trade in line with the meltdown in overseas markets.

The 30-share index, which had lost 271.10 points in the previous session, plunged further by 434.46 points to 15,790.49 points.

The wide-based National Stock Exchange index Nifty plunged by 129.80 points to 4,715.55 points.

Marketmen said investors sold shares heavily after a steep fall in the US and Asian stocks markets as poor US job data stoked concerns over the strength of an economic recovery sending commodity and energy prices tumbling.