The market halved its losses in afternoon trade, with the Sensex falling 184.55 points to 32,089.12. The index fell as much as 358 points intraday.
The 50-share NSE Nifty was trying very hard to hold psychological 10,000-mark, down 52.50 points at 10,004.90.
The broader markets were also under pressure as the BSE Midcap and Smallcap indices dropped 0.7 percent on weak breadth.
About three shares declined for every share rising on the BSE.