The BSE Sensex slumped 480 points or 1.6 per cent, while the Nifty declined nearly 150 points below the key 8,250 levels in morning trade on Friday. 47 of the 50 stocks on the blue chip Nifty index traded lower in morning trade, indicating the magnitude of selloff in domestic equities. The Sensex has now shed nearly 800 points in two sessions.

Here's your 10-point cheat-sheet to the story



1) The continued depreciation in the rupee, which traded near 66 per dollar, is the biggest dampener for domestic stock markets, analysts said. "Unless we see some stability in the currency, I would not be surprised that markets continue to fall," said Avinash Gorakshakar, CIO & Head Research of Precision Investment Services.



2) The rupee is now trading at its weakest since September 2013, when India was in the midst of its worst currency turmoil in more than two decades. The rupee, along with most other emerging market currencies, has come under sustained selling pressure since China devalued its yuan on August 11.



3) Reserve Bank of India Governor Raghuram Rajan on Thursday said China's devaluation of the yuan was not a concern, but did not rule out a currency war if the move was part of a long-term competitive devaluation.



4) The rupee has depreciated by nearly 3 per cent since China started devaluing its currency. That compares with 0.5 per cent depreciation in the rupee since January 1, 2015.



5) The depreciation in the rupee hits foreign investors and diminishes their returns. Analysts say foreign funds have started selling shares aggressively because of the rupee fall. Prateek Agarwal of Ask Investment said foreign funds would not come in to the country or pull back their money from the markets because rupee fall translates in to a loss.



6) From August 1 to August 19, foreign investors have been net sellers to the tune of nearly Rs 3,000 crore in the cash market, but on Thursday they sold shares worth Rs 1,000 crore, according to latest data.





7) The rupee is now perilously close to 66 per dollar. According to Anindya Banerjee of Kotak Securities, a fall beyond 67 per dollar may create panic among investors. "Beyond 67 or so it will start hitting unhedged players in the bond market, and it can become a self-fulfilling trade," Mr Banerjee added.8) Markets in India are also reacting to the global selloff in equities. Asian stock markets traded sharply lower today, while the Wall Street closed at a 6-month low overnight.9) The selloff in global stock markets has been attributed to rising fears of a slowdown in China, the world's second biggest economy. A survey on Friday showed Chinese factories contracted at their fastest pace since the depth of the global financial crisis in 2009.10) The selloff in global stock markets has sent investors scurrying to the safety of bonds and gold.(With inputs from Reuters)