NEW DELHI: Global stock markets plunged, as US President George W Bush's tax plan to revive the world's largest economy disappointed investors. In the Asian trade on Tuesday, Indian stocks tumbled over 10 per cent triggering the circuit breaker.

South Korea closed down 3.0 percent at a five-month low, Singapore shed 6.03 percent and Sydney lost 2.9 per cent. After heavy losses in Asian trade, it was the turn of the European markets to suffer, with the main bourses posting losses of between three and five percent by midday as investors headed for the exits, dealers said.

They said that after high hopes that Bush would announce strong measures to prevent the US economy going into recession, the markets did not find enough to offset all the bad news coming through on the banks and the collapse of the US housing market. In India, stock market benchmark Sensex nosedived 1,408.35 points, its biggest single-day loss.

The downslide prompted government to caution investors against market rumors, while blaming global uncertainties for the fall. "Orderly growth of the capital market is a priority of the government. I want to assure the citizens of India that sustained growth of the market is a priority," Prime Minister Manmohan Singh told reporters.

Fundamentals of the Indian economy remain strong, he said in New Delhi. Market players said investors also turned jittery after Reserve Bank governor Y V Reddy said in Mumbai that global financial markets have become far more uncertain than before and RBI will consider a possible recession in the world's biggest economy while reviewing its monetary policy. The plunge shaved off more than Rs six trillion from investors' wealth. Foreign institutional investors sold shares worth almost Rs 3,300 crore, according to provisional BSE data.

Market players said Citigroup and Morgan Stanley, hit by mortgage-related losses in the US, were believed to be aggressive sellers during the day. Markets were reacting to Bush' plan for 140 billion dollars in temporary tax cuts and other measures. Bush's package "is seen as too late and not strong enough to make an impact," said Najeeb Arhom, head of research for retail clients at Fraser Securities in Singapore. "It looks like the US is heading for a recession or may be already (is) in recession, looking at the data," he said.

Asian market had rebounded earlier on hopes for Bush's stimulus plan but opened sharply down after seeing Wall Street's lack of enthusiasm to the announcement. Bush said his plan would be worth "around one percent" of US gross domestic product and offer tax rebates, incentives for businesses and other measures to encourage growth. Dealers said they had hoped for surprises in Bush's much-anticipated announcement, particularly on how to salvage the troubled housing market.