Stock markets tanked more than 1 percent to close at three-week low levels following a global slide in equities due to trade war concerns which also dragged the rupee to a record low of 72.67 in day trade.
The benchmark 30-share BSE Sensex closed at a three-week low of 37,922.17, down by 467.65 points or 1.22 percent, which was its biggest single-day fall since March 16 when it lost 509.54 points.
The 50-share NSE Nifty also dropped below the 11,500-level by plunging 151 points or 1.30 percent — its biggest single-day fall since February 6 — to close at 11,438.10, the lowest closing since August 16. Intra-day, it hit a low of 11,427.30.
Negative leads from global markets as investors turned cautious amid fears of a possible escalation in the US-China trade conflict hit the market sentiment.
“Markets slid as fears of escalating US-China trade war dented the confidence. As a direct impact of rising crude oil price, widening current account deficit and strengthening dollar on account of a strong US job data, rupee succumbed to a new low and 10-year yield rose further,” Vinod Nair, Head of Research, Geojit Financial Services Ltd said.
US President Donald Trump on Friday threatened to slap tariffs on all Chinese imports, fanning fears of intensifying trade war between the two major economies and their ripple impact on emerging markets.
Beijing also warned of retaliation if the US goes ahead with any new measures.
Sentiment also took a blow after Moody’s Investors Service said sustained weakening of the rupee is “credit negative” for Indian companies which generate revenue in rupees but rely on US dollar debt to fund their operations.
The Indian rupee has depreciated 13 per cent so far in 2018 and touched a historic low of Rs 72.67 to a dollar Monday before a rebound on strong intervention of the Reserve Bank.