(Representative image)

NEW DELHI: Equity indices on Monday started very weak with the benchmark BSE sensex plunging over 650 points as banking and metal stocks witnessed heavy losses amid trade war escalation between the United States and China.

Both domestic and global markets have been badly spooked since US President Donald Trump abruptly declared he would slap 10 per cent tariffs on $300 billion in Chinese imports, ending a month-long trade truce. To which, Beijing vowed on Friday to fight back.

Sensex crashed 654 points or 1.76 per cent to 36,464 in early trade, while the broader NSE Nifty moved 207 points or 1.88 per cent lower to 10,790.

Major laggards on the BSE index include Yes Bank, Tata Motors, Vedanta, State Bank of India (SBI), Tata Steel and PowerGrid with their stocks falling as much as 6.89 per cent. On NSE, except for Nifty IT, all other sub-indices were trading in red with Nifty PSU Bank and Metal sliding as much as 4.67 per cent.

Analysts have said that the Reserve Bank of India's (RBI's) interest rate decision, US-China trade conflict and quarterly earnings would influence trading in the equity markets this week.

"The market is now awaiting the RBI meet which is scheduled this week," Mustafa Nadeem, CEO, Epic Research, told news agency PTI.

Investors will also keep an eye on taxation issues following reports that the Prime Minister's office and the finance ministry have held talks regarding tax surcharge on FPIs (Foreign portfolio investments) announced in the Union Budget.

Meanwhile, the Indian rupee tanked 98 paise to 70.58 against the US dollar in the opening trade.

(With PTI inputs)

