Indian stock markets continued to trade in the negative terrain, following the pessimistic reaction in other stock markets as Europe's debt crisis and increasing US jobless claims fuelled investor risk aversion across the globe.

The 30-share index BSE Sensex, which opened at 16,317.94, declined 177.08 points (1.07%) to trade at 16,342.6, in afternoon trade.

In contrast, the broader 50-share S&P CNX Nifty stood at 4,899.55, down 0.97% as against its last closure.

Huge selling pressure was seen across broader markets.

The BSE midcap index declined 1.75% and the BSE smallcap index remained down by 1.88%.

In other Asian markets, traders wanted to reduce exposure to more hazardous instruments following the European crisis.

The Japanese Nikkei closed at 9,784.54 after losing 2.45%, whereas the Shanghai Composite index was trading 1.08% up at 2,583.52.

Hong Kong and South Korean markets were closed today.

European bourses were also weak during early trade today.

Britain's key index FTSE 100 shed 0.93% to trade at 5,025.91.

The French CAC 40 too was trading 0.86% lower at 3,402.88 points and the German DAX was at 5,796.66 points, down 1.21%. (With Inputs from Agencies)