At 13:08PM, the 30-share Sensex was down 429 points at 27,684 and the 50-share Nifty was down 126 points at 8,396.

China's benchmark share index, the Shanghai Composite slumped 8.5% at 3,725.56.

Private lenders such as ICICI Bank, HDFC Bank and Axis Bank were the top Sensex losers along with Infosys, Tata Motors and L&T.

Markets continue to remain weak with Nifty trading below the crucial mark of 8,500 as participants remain cautious amid reports that market regulator Sebi may review the participatory notes (P-Notes) norms and Government’s move on the above to restrain black money.

Meanwhile, investors remained edgy as the panel headed by Justice AP Shah to examine the issue of levying minimum alternate tax (MAT) on Foreign portfolio investors (FPIs), submitted its report to the government previous week.

At 11.55 AM, the Sensex was at 27,821 levels, down by 291 points while the Nifty was at 8,437 levels, 83 points down. The broader markets are performing better than the larger peers with BSE Midcap and Smallcap trading 0.4% and 0.3% down respectively. The market breadth remains weak with 1,288 declines against 1,089 advances on the BSE.

The Supreme Court-appointed special investigative team (SIT) had, last week, recommended stricter norms for participatory notes (P-notes) to check the flow of unaccounted money. The markets seem to have viewed this development in a negative light.

All sectors are trading in red with BSE Metal, Capital Goods, Bankex, Oil & Gas indices trading lower between 1-1.7%.

Shares of metal companies are trading lower. The Thomson Reuters CRB commodities indices has touched its lowest level in six years, dragged down by copper prices. Vedanta, Tata Steel, Hindalco, JSW Steel, Jindal Steel, NMDC are trading lower between 1-3.5%.

Banking stocks are taking a beating today with and companies with high FII holding, like ICICI Bank, Axis Bank down 2% each. Among other peers, HDFC Bank, Kotak Mahindra, SBI, IndusInd, YES Bank, PNB are trading lower between 1-2.5%.

Jaiprakash Associates total bank loans and long-term non-convertible debentures (NCDs) worth Rs.29,303.40 crore have been reduced to default rating by rating firm Credit Analysis and Research (CARE) due to a delay in servicing of debt by the company and poor liquidity. According to an 8 July report by brokerage house UBS, ICICI Bank Ltd, SBI, Axis Bank Ltd and Yes Bank Ltd have significantly increased their loan approvals to Jaypee Group.

SpiceJet has gained 6% on media report stating that the Dubai government-owned low-cost carrier flydubai is in talks to buy a stake in SpiceJet.

Tata Motors has dipped 3% its lowest level since March 2014 on the BSE, on concerns about a slowdown in China.

Shares of Reliance Industries which gained in the morning trades after company posted better-than-expected its first quarterly earnings after trading hours on Friday has slipped by 15 on profit booking.

Tech Mahindra is 1% higher whereas Ambuja Cements is trading 1.45 lower ahead of the Q1 results due today.