Mumbai: The Sensex lost nearly 500 points on Monday as investors feared a tit-for-tat trade battle between the US and India after the latter raised tariffs on 28 US items in retaliation to US tariffs. The US had raised tariffs on Indian aluminium and steel last year and had ended India's $5.6 billion trade concessions under the Generalised System of Preferences (GSP) programme earlier this year.
Besides, the US-China trade tension also weighed on the investor sentiments. Caution was also seen ahead of the Federal Reserve meeting which will start on June 18-19.
"Domestic market has been caught in a bearish grip as investors are increasingly turning cautious led by global trade war which has got murkier. Additionally, geopolitical tensions in the Middle East triggered a sudden spurt in oil prices," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.
"Domestic market consolidation will be maintained till global events unfolds like central bank and GST council meet this week. Consolidation was broad based with metals, auto, pharma and financials under performing," he added. Metal stocks lost the most over slowdown fears.
The Nifty metal index declined by 2.83%. The Sensex, after trading in the red throughout the day, closed 491.28 points or 1.25% lower at 38,960.79. The Nifty also shed 148.45 points or 1.26% to settle at 11,674.85.
