Mumbai, Aug. 6: The benchmark BSE sensex tumbled 235 points on heavy selling by funds as concerns over a global credit squeeze and worries about US housing loan business continued.

The fall was expected as Dow Jones had ended 280 points lower because of sub-prime concerns. Market circles, however, said the cut would have been deeper but for value buying in select heavyweights in the last hour of trade.

The benchmark index opened sharply lower at 14892.60 from last Friday's close of 15138.40 because of weak global cues. It immediately touched a one-month low of 14705.58, a crash of around 433 points. However, it recovered on good buying support from domestic funds and closed at 14903.03, recording a fall of 235.37 points, or 1.55 per cent.

The S&P CNX nifty of the National Stock Exchange also touched a one-month low of 4267.15 before closing at 4339.50, a net loss of 62.05 points, or 1.41 per cent, over the previous close of 4401.55.

Seshadri Bharathan, director – Stock Broking at Dawnay Day AV, said, “Yet again, weak cues from the US and the Asian markets dragged the domestic bourses lower at open.” However, after opening 400 points lower, the sensex managed to recover partially as index heavyweights like State Bank of India, ITC, Tata Consultancy Services and Mahindra & Mahindra managed to buck the trend towards the end.

Market circles are not ruling out a bounce-back tomorrow. They, however, feel much will depend on how the US markets close on Monday.

“We may see some rallies. But that does not mean that sanity has returned to the markets. It will take some more time for things to settle down,” an analyst with a foreign brokerage said. The analyst was hinting at more negative news from the US. Last week, Standard & Poor’s had downgraded investment bank Bear Stearns on worries about its exposure to mortgages.