Mumbai, Aug 21 (IANS) In tandem with the global sell-off in stock markets, overseas funds were net sellers in the Indian market in August to the tune of over $1.5 billion (about Rs.6,851.7 crore) till the week ended Friday, according to data available with the capital markets watchdog.

Sentiment has turned bearish in the Indian equities markets and globally following the downgrade of the US sovereign debt on Aug 6 and indications of another bout of recession in Europe and the US.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), ended Aug 19 at 16,141.67 points, down 11.29 percent or 2,055.53 points from its close on the last trading day of July at 18,197.2 points.

The National Stock Exchange's benchmark, the S&P CNX Nifty, too lost 636.35 points or 11.6 percent to end the week at 4,845.65 points compared to its close on July 29 at 5,482 points.

FIIs had been net buyers in July, pumping in over $1.8 billion in the equities markets, according to data available with the Securities and Exchange Board of India (SEBI).

Foreign funds took out about $225 million in three days of trading in the past week, which saw only four days of trade as Aug 15 was a holiday. Data for Friday was not yet available.

Analysts, say that foreign institutional investors (FIIs) are only following the global selling spree and that there are fears that the global economic turmoil could have a slowing down effect on the Indian economy.

"In India there is a fear that domestic growth may be hampered because of the concerns in global economies. Any fiscal consolidation initiatives or deepening of debt crisis in Euro region may affect the demand as well as global trade," said a research note from brokerage firm SMC.

Following the sell-off, the net inflows from FIIs has dropped to $920 million, down from $2.43 billion as on July 29.

The levels are far below the record $28.83 billion overseas funds pumped into the markets in 2010.