Why have the Nifty and the Sensex corrected so sharply on 16 March?

The Sensex is down by nearly 1500 points around 11.30 on 16th March and this is largely attributed to the US decision to cut rates sharply.

US cut its rates in a sharp move from 1.25% to 0% in a single swift move and that has created panic in the market that the world could actually be slowing down much more than what investors and businesses had anticipated. The US has already admitted that growth in the fourth quarter is almost down to zero growth. That is also spooking markets.