The Bombay Stock Exchange benchmark Sensex today tumbled by close to 500 points to close at two- month low amid a steep fall in bourses across the world on fears that economic recovery will not be as swift as expected.

Extending losses to the sixth day in a row, the 30-share Sensex closed sharply lower by 491.34 points to close at 15,404.94, a level last seen on September 3.

The biggest fall before this was on August 17 when it tanked 600 points. In the previous five trading sessions, it had lost 914.53 points.

The National Stock Exchange index Nifty also dropped by 147.80 points, or 3.14 per cent to 4,563.90.

Hectic selling was further augmented in the last one hour of trading trading after in European stocks opened weaker.

Blue-chips such as RIL, Infosys, SBI led the fall. Metal major Hindalco was the biggest loser at 10.50 per cent.

Bharti Airtel, Maruti Suzuki and Sun Pharma avoided selling fury and helped the market to avert steeper fall. Among the 30-BSE index stocks, 27 ended with hefty losses.

The stocks of RIL, Infosys, SBI, Hindalco and DLF carry nearly 30 per cent weight on the benchmark index.

Marketmen said selling was triggered by steep fall in global markets discarding positive developments like better manufacturing data in the US. However, fears of mounting job losses dampened the investor sentiment. In Europe FTSE 100 index opened over 100 points lower.

Fears over the cut in the government stimulus, mainly in the financial sectors, following positive US manufacturing and home sales data, sent the world stocks to near one-month lows today. Investors are waiting for the outcome of the US Federal Reserve two-day meeting on interest rates late today.

Poor results by some European banks, too, affected the market sentiment.

The broader 50-share Nifty of the National Stock Exchange plunged by 147.80 points to end at 4,563.90 points.

Selling was so strong that all sectoral indices closed with sharp to moderate losses. The BSE-Realty index was the top loser with a fall of 373.50 points, followed by the BSE-Metal by 829.49 points and the BSE-Oil & Gas by 386.52 points or 4.10 per cent.

Among the index-based shares, DLF slumped by 9.04 per cent, Jaipra Asso by 7.52 per cent, Sterlite Ind by 6.40 per cent, ACC by 6.20 per cent, REL Infra by 5.96 per cent, RCom by 5.71 per cent, Tata Steel by 5.51 per cent, Wipro by 4.36 per cent, SBI by 3.99 per cent and HUL by 3.60 per cent.

The market breadth was negative as 2,171 counters ended with losses against only 534 that finished with gains on BSE.

The trading volume dropped sharply to Rs 5,120.83 crore from Rs 6,207.52 crore on last Friday. RIL topped the list of highest traded securities with a turnover of Rs 206.92 crore.