Both Sensex and Nifty followed the blood bath witnesses in the US stock exchanges. The Dow Jones nosedived to suffer its worst points fall in history, wiping out all its 2018 gains, while the S&P 500 also took a beating to sit down for the year. US wage data on Friday pointed to quickening inflation which may lead to higher rates by the US Federal Reserve.
A sell-off in global markets created a sense of panic among both traders and investors on domestic bourses on Monday which are already coming to terms with the budget woes.
The heavy selling comes after months of surges fuelled by optimism over the US economy, corporate earnings and the global outlook.
While traders have been investing heavily into equities, pushing many global indexes to record or multi-year highs, there has been growing concern on trading floors about elevated US Treasury bond yields—at four-year highs—and the likelihood of fresh Federal Reserve interest rate hikes.