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Nifty, Sensex plumb fresh five-month lows in global selloff

File photo of Bombay Stock Exchange (BSE) building in Mumbai. Photograph:( Reuters )

Reuters Bengaluru, Karnataka Aug 05, 2019, 03.59 PM (IST)

Indian shares plunged to fresh five-month lows, led by losses in metals and public sector bank stocks, in a global selloff due to the escalating Sino-US trade war.

The Chinese yuan broke below the psychological 7-per-dollar threshold after US President Donald Trump abruptly decided on Thursday to slap 10 per cent tariffs on the remaining $300 billion in Chinese imports.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.7 per cent.

The rupee hit its weakest level since mid-May at 70.49 rupees per dollar.

Domestic investor sentiment in equities, which seemed to be upbeat on Friday after reports said the government was looking into foreign portfolio investors' tax concerns, returned to being bearish due to the escalating trade war.

The broader NSE Nifty was down 1.11 per cent at 10,868.25 as of 0801 GMT, while the benchmark BSE Sensex was 1.11 per cent lower at 36,670.62.

"The economy is in doldrums and steps taken won't give a boost in the short-term. The global economy is also doing much better than the domestic economy," said Madhumita Ghosh, Associate Dean at Tasmac Global Solutions.

"We don't see any trigger for markets to go up in the short term." Most sectors were trading in the red.

The Nifty public sector bank index plummeted as much as 5.12 per cent, while the metals index sank as much as 3.9 per cent, their lowest in over three years. The Nifty autos index slithered down about 1.9 per cent.

Nifty IT was the only index trading higher, boosted by the weak rupee.

The India volatility index shot up as much as 16.16 per cent, its highest in over two months.

Yes Bank was the top loser among the Nifty stocks and fell about 6.7 per cent, while Tata Motors was down 4.7 per cent.

Among the few gainers were Tata Consultancy Services, up 1.4 per cent, and Infosys Ltd, which rose 0.5 per cent.