The benchmark S&P BSE Sensex tumbled by another 240 points in the morning trade on persistent selling pressure from operators as Asian stocks fell after minutes from the Federal Reserve's last meeting signalled US stimulus may be reduced in coming months.
China's manufacturing activity decelerated this month also affected the market sentiment.
The Sensex resumed lower at 20,579.26 and fell further to 20,369.07 before quoting at 20,395.26 at 1030 hours, showing a loss of 239.87 points, 1.16 per cent from its last close.
The NSE 50-share Nifty also tumbled by 72.60 points or 1.19 per cent to 6,050.30 at 1030 hours.
Major losers were Sun Pharma (2.15 pct), ITC (1.82 pct), Icici Bank (1.79 pct), HDFC (1.76 pct), SSLT (1.58 pct) and Tata Steel (1.36 pct).
Asian stocks fell in their early trade as key benchmark indices in Taiwan, Hong Kong, China, Singapore, Indonesia and South Korea fell by 0.43 pct to 1.2 pct, while Japan's Nikkei 225 index rose 1.27 pct.
Meanwhile, foreign institutional investors (FIIs) bought shares worth a net Rs 80.40 crore yesterday as per provisional data from the stock exchanges.
