The benchmark Sensex, which had its biggest fall in four months by plummeting 4.34 per cent on the Bombay Stock Exchange in the morning today, recovered partially on buying by foreign and domestic funds.

The BSE 30-share index had lost 653 points within minutes of start of trading over widening credit crunch in US markets, but rebounded partially to 14.584.92 points at 1145 hrs.

The second wide-based National Stock Exchange's Nifty, after losing 199 points at open, rebounded to trade at 4,212.35 points, still lower by 157.85.

Taking cues from global markets, investors indulged in panic sales ignoring a statement by international rating agency Standard & Poors that problems with subprime mortgage in the US will not result in a crisis.

After a hefty fall in Dow Jones Industrial Average and Nasdaq last light, the weak trend extended to Asian stock markets as they opened for trading this morning.

Singapore's straight times index dropped by 4.6 per cent, Japan's Nikkei-225 by 2.72 per cent, Hong Kong's Hengseng index by 3.7 per cent, South Korean's Kospi by 6.35 per cent and Chinese stock index by over two per cent.

The Standard & Poors' 500 Index fell yesterday, erasing its gains for the year. Countrywide Financial Corp, the biggest US mortgage lender, declined after Merrill Lynch & Co raised the possibility of it being forced into bankruptcy.

This heightened concern that losses linked to subprime, or higher risk, loans could spread and derail global growth, market observers said.

Metal segment index suffered the most by losing 506.14 points at 10,510.49, followed by capital goods index by 440.67 points at 12,339.84. Banking index plunged by 327.23 points at 7519.06 and realty index by 291.60 points at 7099.46.