According to market observers, the domestic equity markets reacted to intensifying trade war fears after China announced additional tariffs on U.S. goods as countermeasures to the United States administration's proposed tariffs covering Chinese exports worth $50 billion with a suggested tariff rate of 25 per cent.
The BSE Sensex fell almost 500 point from its day's highest point weighed down by metal, banking and consumer goods stocks.
On a session-wise basis, the BSE Sensex at 3.30 p.m. closed lower by 351.56 points or 1.05 per cent to 33,019.07 points from its previous session's close. This is the benchmark's biggest fall since March 23, when it had lost 409.73 points.
"Investors grew wary of renewed trade war fears between the USA and China, and adopted a note of caution", said Karthikraj Lakshmanan, senior fund manager-Equities, BNP Paribas Mutual Fund, while adding that Indian indices mirrored the overall global fall. The Bank Nifty index fell 1.5 per cent, with shares of Axis Bank, Kotak Mahindra Bank and Yes Bank declining over 2 per cent each. Of the 30 sensex stocks, 25 closed in the red.
ICICI Securities which made a weak market debut today, closed over 14% lower than its issue price of Rs 520.
Saudi king reaffirms support for Palestinian Arabs
Speaking of Ithe Shiite majority state, the Crown Prince said that "I believe the Iranian supreme leader makes Hitler look good". That same Islam was widely promoted in Muslim countries around the world, thanks to the Saudi state's deep pockets.
Karthikraj Lakshmanan, Senior Fund Manager-Equities at BNP Paribas Mutual Fund said, " It has been a tumultuous day on the bourses today as investors grew tired of renewed trade war fears between the U.S. and China, and adopted a note of caution.
The India VIX index, a gauge for market volatility, jumped 7.6 per cent to its highest close in six weeks. The overall breadth was was also weak with nearly 1,500 stocks in the red as against 1,157 gainers.
Midcaps and small cap indexes fell 150 points and 178 points respectively on BSE.
China's retaliation came after trading hours for Japan's Nikkei, which added 0.2 per cent in thin volume, while Chinese blue chips ended down 0.2 per cent.
Boeing and Caterpillar led a slide in big US manufacturers and technology companies that bore the brunt of the deepening US-China trade spat, while Germany's exporter-heavy DAX index fell more than its large European counterparts. The Dow Jones Industrial Average soared 389 points to close at 24, 033, the Nasdaq gained 71 points to finish at 6,941 and the S&P 500 surged 33 points to end at 2,614.