Sensex sheds 491 pts on panic selling

This is the sharpest fall for the key index in 21 weeks8211;the Sensex tanked 626.71 points last August 17 following monsoon worries.

The wide-based National Stock Exchange index Nifty 50 broke two psychological levels today 8212; 5,000 and 4,900 8212; and plunged 154.80 points to 4,853.10. It commenced the day well below 5,000 points level opening with a loss of 63 points.

Marketmen said trading sentiment remained bearish in line with subdued global markets on reports that China may impose further measures to squeeze money supply and the Samp;P downgraded the outlook for Japanese economy to 8216;negative.8217;

Yesterday,the global rating agency Samp;P downgraded the outlook for the Japanese economy to 8216;negative8217; and warned that it would revise the ratings of Japanese government debt if the world8217;s second largest economy does not contain its ballooning deficit.

The Japan8217;s benchmark index Nikkei-225 closed lower 0.71 per cent as a stronger yen weighed on exporters. The US stock markets had closed marginally lower last night.