Mumbai, Nov 23 (IANS): Indian equities fell sharply to a two-year intra-day low Wednesday as traders, spooked by a weak rupee and global economic turmoil, sold in droves across the market breadth. Before a recovery later, the benchmark index had plunged 586 points.

The 30-scrip sensitive index (Sensex) of the BSE, which opened lower at 15,969.6 points, was ruling at 15,647.93 points -- down 417.49 points or 2.6 percent from its previous close at 16,065.42 points.

The recovery came after the key index had fallen 586 points to a two-year low of 15,478.69 points in intra-day trade.

The 50-scrip S&P CNX Nifty of the National Stock Exchange was also trading in the red, 118.8 points or 2.47 percent lower at 4,693.55 points. It had fallen to a low of 4,640.95 points earlier.

The weak rupee continued to weigh on investors ahead of the derivatives contract expiry Thursday. Even though the rupee rose over one percent from the day's low to trade at 51.70 to a dollar, negative sentiments continued to surround the currency.

The Reserve Bank of India is apparently intervening to stem the rupee's fall as state-run banks were reported selling dollars.

The rupee had fallen to a record low of 52.73 Wednesday but recovered by close of the day.

Indian equities markets have been among the worst performing bourses this year with sentiments of domestic investors dampened by rising interest rates, slowing growth and high inflation.

Foreign investors on the other hand also had to contend with a debt crisis in Europe and sluggish economy in their own markets, resulting in them pulling out from Indian markets to other destinations which are giving better returns.

Broader markets Wednesday were also ruling lower with the BSE 500 index down 2.68 percent. The BSE midcap index was trading 2.06 percent lower, while the BSE smallcap index was down 1.99 percent.

All 30 scrips on the Sensex were on the losing side. All sectroal indices on the BSE were also in the red. Oil and gas, banking, telecom and IT stocks were among the worst hit.

Asian markets were also trading lower as data from the US showed weaker-than-expected economic expansion in the US. Also provisional data from China showed manufacturing sector slowing.

The Japanese markets were closed on account of a holiday. Hong Kong's Hang Seng was ruling 1.99 percent lower at 17,887.69 points.

The Chinese Shanghai composite index was ruling 0.48 percent down at 2,401.05 points.