Equity benchmark Sensex plummeted over 2,000 points and the Nifty gave up the 9,400 level in opening session on Monday after the Federal Reserve’s rate cut fanned concerns over the impact of COVID-19 on world economy.

The rupee too depreciated 41 paise to 74.16 against U.S. dollar in morning session.

Resuming its downward spiral, domestic BSE Sensex sank 2004.20 points or 5.88% to 32,099.28 in morning session.

Similarly, the NSE Nifty cracked 596.25 points, or 5.99%, to 9,358.95.

In the previous session, the 30-share BSE barometer recovered over 5,380 points from its intra-day low of 29,388.97, ending 1,325.34 points or 4.04% higher at 34,103.48. The Nifty settled 365.05 points, or 3.81%, up at 9,955.20.

All Sensex components were trading in the red. IndusInd Bank was the top loser, tanking up to 12%, followed by ICICI Bank, HDFC, Axis Bank, Titan, Tata Steel and Bajaj Finance.

According to traders, volatility heightened in global markets as U.S. Federal Reserve’s interest rate cut stoked concerns over an impending economic recession.

Faced with a growing economic shutdown amid the COVID-19 pandemic, the U.S. Fed on Sunday made its second emergency rate cut in less than two weeks, cutting the benchmark borrowing rate to a range of 0-0.25%, where it was during the 2008 global financial crisis.

U.S. stock futures fell sharply after the Federal Reserve slashed interest rates.

Meanwhile, the Reserve Bank of India on Friday said it is closely monitoring the current global situation and assured that it will take all steps to keep markets adequately liquid and stable.

Further, Bank of Japan (BOJ) convened an emergency policy meeting after the Fed rate cut. A BOJ statement said the meeting was to discuss monetary control matters based on recent economic and financial developments.”

Japan’s Nikkei was the sole Asian benchmark that did not lose ground early Monday.

Elsewhere in Asia, Shanghai Composite Index, Hang Seng and Kospi fell up to 2%.

Incessant foreign fund outflow also kept market participants on edge, traders said.

On a net basis, foreign institutional investors sold equities worth ₹6,027.58 crore on Friday, data available with stock exchanges showed.

Meanwhile, Brent crude oil futures plunged over 2.98% to USD 32.84 per barrel.

COVID-19 has claimed over 6,000 lives and infected more than 1,62,000 people across the globe.

The number of infected cases in the country crossed 110 on Monday, the Union Health Ministry said.