At 12.30 pm, the markets had plunged even further from their early morning losses, with the Sensex and the Nifty down around 1.75%.
Top Sensex losers included BHEL, Tata Motors, ONGC, Maruti Suzuki, Tata Steel, Axis Bank, State Bank of India, M&M, Hindustan Uniliver and Hero Motocorp.
Coal India was the only Sensex scrip to trade with gains.
Earlier, Indian stock markets opened sharply lower, tracking the Chinese stock market crash.
The S&P BSE Sensex opened with a loss of 269 points, or 1.24%, while Nifty was down 80 points, or 1.21%, at 7659
Tata Motors, Vedanta, Axis Bank, ICICI Bank, Hindalco and Tata Steel corrected sharply on the BSE.
Stocks with exposure to China, especially commodity stocks, are likely to plummet further.
Stock markets in China crashed by over 7% on Thursday, triggering the circuit breaker and forcing the stock exchanges to suspend trading for the day.
This is likely to impact Indian stock markets when trading begins at 9.15 am
"China stocks dive over 7%, trading halted for whole day after #circuit breaker triggered time in 4 days," tweeted ANI, quoting Xinhua.
News agency AFP said that trading has been suspended.
A similar crash on Monday led to the Sensex by falling over 500 points.
KOSPI, Nikkei, Hang Seng also were trading lower as a result of the Chinese stock market crash.
The fall on Monday was linked to poor manufacturing activity in December in China and a sharp decline in the yuan exchange rate.
Xinhua reported that the Caixin General China Manufacturing Purchasing Managers' Index (PMI), which was released Monday, dropped to 48.2 in December 2015 from 48.6 in November.
Monday's fall in the Chinese stock exchanges also led to a fall in Japanese stock exchange, with the Nikkei share average falling to a two-and-a-half-month low, reported Reuters.
China's slowdown worries are rubbing off on global stock markets, including India.