Indian stock markets have ushered in the new year on a negative note, with the benchmark indices posting their worst weekly losses in the past four years amid turmoil in Chinese markets.

For the first full week of 2016, the benchmark BSE Sensex and 50-share Nifty posted a decline of 4.7%, hitting worst weekly losses since November 2011.

"The highs hit on March 2015 appears to be a distant memory as ​the benchmark indices ​have been on a declining curve since then. Moreover, Indian indices have got to the wors​t possible start in 2016 as well with Sensex plunging below 25,000 for the first time since September 8, 2015 hitting its 52-week low in intra-day trades on Thursday​," said Amar Ambani, Head of Research, IIFL.

However, both the indices ended in green on Friday following a rebound in Chinese equity markets, which ended 2% higher as the authorities intervened in the market by buying shares and suspending circuit filters.

Overall, the Sensex was down over 1,200 points to end the week below the 25,000 level, while the Nifty fell over 300 points closing at 7,601 points.

Earlier this week, a private survey showed that China's manufacturing activity fell sharply in December triggering a heavy sell-off in the country's stock markets. The panic selling resulted in suspension of trading on Monday.

Trading in Chinese equity markets was suspended for the second time this week on Thursday after the benchmark index fell over 7% hitting the lower circuit. The fall was mainly driven by concerns over yuan devaluation.

The sharp sell-off intensified investors' worries over risks from China to global economy and some analysts have warned that the world is heading towards another crisis like the one witnessed in the second half of the last decade.

"Rising concerns over a global slowdown, particularly due to a possible hard landing in China, heightened geo-political tensions and lack of visible recovery in India Inc earnings are the reasons for the ongoing fall in the stock market. China's Yuan devaluation and Hydrogen bomb testing by North Korea dragged global markets into a whirlwind," said Ambani.

The concerns over the slowdown in China has led the World Bank to cut its 2016 forecast for the Asia's biggest economy to 6.7%, from an earlier estimate of 7% made in June.

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