Fresh concerns over the trade war between the U.S. and China sent equity markets into a tailspin on Monday, with Indian benchmarks shedding close to a per cent each.
The 30-share Sensex opened the day lower by nearly 250 points before losing further ground to touch a low of 38,509 — a fall of over 450 points compared to Friday's close of 38,963.
The benchmark finally closed at 38,600.34, down 362.92 points, or 0.93%.
As many as 25 of the 30 constituents, including heavyweights like ICICI Bank, Reliance Industries, Infosys, HDFC, Hindustan Unilever and State Bank of India, ended the day in the red.
On an overall basis, more than 1,600 stocks lost ground on BSE, which was almost double the number of gainers at 831.
The broader Nifty lost 114 points or 0.97% to close at 11,598.25.
“The fall in the markets was mainly due to U.S. President Donald Trump planning on doubling the tariff rate on $200 billion of Chinese goods,” said Hemang Jani, head – Advisory, Sharekhan.
“We expect market turbulence to continue on the back of U.S.-China trade tensions, the ongoing general elections and Q4 earnings season," Mr. Jani added.
In a series of tweets on Sunday, U.S. President Donald Trump said that tariffs on Chinese goods worth $200 billion would be shortly increased from 10% to 25%. Another $325 billion worth of goods that remain untaxed would soon attract a rate of 25%, he added.
Panic sell-off
This led to a panic sell-off in most markets, with the Chinese benchmarks shedding more than 5%, while Hang Seng lost nearly 3%. All the other leading equity indices in Asia also ended in the red on Monday.
Mr. Trump said on Twitter the U.S. would more than double tariffs on $200bn (£152bn) of Chinese goods on Friday and would introduce fresh tariffs.
Incidentally, the India VIX, which is looked upon as a ‘barometer’ of short-term volatility, rose nearly 10% to 26.43.
“Market volumes were lower than recent average as buyers stayed away amidst tense times,” Deepak Jasani, Head of Retail Research, HDFC Securities, said.
“India VIX closed 10.2% higher at 26.5 – more than three-year high,” he added.
Meanwhile, the rupee weakened 18 paise against the dollar to close the day at 69.40 over renewed concerns over global trade wars that made foreign investors withdrawfrom emerging markets.
Other currencies such as the Turkish lira, the Mexican peso, and the Australian dollar declined up to 0.5% on trade worries.