Global markets felt the jitters on Wednesday as recession fears resurfaced after a report pointed to a slowdown in the US non-manufacturing sector.

Indian markets too fell, with the Sensex plunging 523.67 points or 2.81% before closing at 18,139.49 points. The broader S&P CNX Nifty lost 161.35 points or 2.94% and closed at 5,322.55 points.

Dealers were extremely apprehensive of the market movement as Wednesday?s fall was accompanied with huge volumes, considered an ominous sign. The combined trading volume (number of shares traded) on BSE and NSE shot up to 114 crore shares against previous day?s 83 crore shares. The combined turnover in the cash segment also jumped to Rs 20,236 crore compared to Rs 17,663 crore. ?This despite the fact that FIIs? net selling has slowed down,? a dealer said.

IT stocks were severely battered as experts believe a recession in the US will have a direct bearing on the bottom lines of these companies. Revenues of IT companies come mostly from the US.

Most IT heavy weight stocks were down by more than 6% on Wednesday. Infosys Technologies was down by Rs100 or 6.25% before closing at Rs1,510.60. Satyam Computers lost 6.74% and closed at Rs 408.65. Among other IT majors, Wipro, Patni Computers and TCS each lost in the range of 4 to 6%.

However, Gopal Agarwal, CIO, Equity, Mirae Asset Management said, ?We see these stocks moving up in case we have a positive signal from the US and the same stocks are severely hit in the case of weak signals, all in a span of one week. I don?t think the bad scenario in the US is going to have a major impact on these companies, as these companies are fundamentally strong.?

As far as today?s market is concerned, we reacted to global cues as there is a major concern of inflows from the US into our markets.?

Emaar-MGF extends issue

High profile real estate company Emaar-MGF has extended its issue closure date by two more days. It has also lowered the price band by Rs 10 to to Rs 530-620 from Rs 540-630. The Emaar-MGF issue, opened for subscription on February 1, was to close on February 6.

This is the second time the company has reduced its price band. Earlier the price band was fixed at Rs 610-690. Sources say the issue closure was extended on poor investor response. Till Tuesday, the issue was subscribed 40% while at the fag end of Wednesday, the issue was subscribed only 74%.