New Delhi - Indian equities markets tanked with the key Sensex index plunging nearly 10 per cent shortly after opening on Friday as foreign funds sold blue-chip stocks due to the global financial crisis and declining Indian rupee.

The 30-share Sensex of the Bombay Stock Exchange which lost nearly 1,730 points in the past five sessions, plunged by 1,088.60 points, or 9.8 per cent, soon after opening.

It later pared its losses and was down 7.4 per cent at 10,496.16 points - its lowest level in more than two years - at noon (0630 GMT).

The broader 50-share Nifty also fell 9 per cent to 3,198.95 points with many blue-chip stocks trading in the negative territory. It was quoted at 3,300.40 points, down 6.07 per cent around the same time.

Market analysts said the panic selling by funds and investors was sparked by fears of the spreading global financial crisis which have seen a meltdown in global markets.

They said the depreciating Indian rupee, which dipped to a six-year low of 49.07 against the dollar, also weighed on the stock prices.

The central Reserve Bank of India announced a 1 per cent cut in the Cash Reserve Ratio (CRR) with banks to inject more money in the market.

The Indian finance minister P Chidambaram told reporters in New Delhi that further steps will be taken to infuse liquidity in the Indian markets.

India's leading IT firm Infosys Technologies fell despite better quarterly earnings. Other losers were ICICI Bank, Reliance Communications, Jaiprakash Associates, Tata Steel, Satyam Computers. (dpa)