Domestic markets on Thursday witnessed their biggest single-day rout in over four months as investors scrambled for the exit amid a flare-up in Sino-US trade tension and the 25-basis point hike in the repo rate by the Reserve Bank of India to cool down inflation.

The BSE Sensex plunged 356 points to close at a one-week low of 37,165.16, while the NSE Nifty dropped 101.50 points to finish below the 10,300-mark. Asian and European bourses tumbled after Beijing said it will retaliate if the US goes ahead with its threat of imposing higher tariffs on Chinese imports. The RBI had on Wednesday cautioned that the rising trade tensions can escalate to a full-blown currency war, hurting global growth. The Sensex recorded its biggest single-day fall since March 23, when it had plunged 409.73 points. The broader Nifty too succumbed to widespread selling and hit a low of 11,234.95, before ending at 11,244.70, down 101.50 points, or 0.89 per cent.

Rate-sensitive auto, bank and realty stocks continued their slide as the hike in rates by the RBI is expected to make loans costlier for consumers. “Weak global market on account of flare up in trade tensions between US and China coupled with RBI’s caution on global currency war resulted in profit booking. As expected, US Fed kept the key rates unchanged and maintained gradual rate hike trajectory for CY18. On the other hand, fall in crude price in expectation of oversupply and better quarter results may restrict a major fall in the market. Mid and small-caps outperformed as signs of revival in earnings is likely to spread across broad indices,” said Vinod Nair, head of research, Geojit Financial Services.

Bharti Airtel was the top Sensex loser, skidding 2.79 per cent, followed by Kotak Bank at 2.54 per cent. Other losers included Maruti Suzuki 1.97 per cent, RIL 1.91 per cent, HDFC 1.90 per cent, Vedanta 1.83 per cent, M&M 1.81 per cent, Tata Motors 1.51 per cent, Asian Paints 1.34 per cent, HDFC Bank 1.30 per cent, TCS 1.24 per cent, L&T 1.22 per cent and Yes Bank 1.16 per cent. On the other hand, Power Grid spurted 2.25 per cent, Coal India 1.07 per cent, HUL 0.92 per cent and IndusInd Bank 0.91 per cent, among others.

Asian stocks tumbled on renewed US-China trade concerns. The Trump administration announced that it is looking at the possibility of slapping a 25 per cent tariff on $200 billion worth of imported Chinese goods – from the initial 10 per cent announced earlier.

Japan’s Nikkei fell 1.03 per cent, Hong Kong’s Hang Seng dropped 2.21 per cent and China’s Shanghai Composite index lost 2 per cent. European markets moved lower even Bank of England meeting hiked the rate despite uncertainty over Brexit. Frankfurt’s DAX fell 1.66 per cent and France’s Paris CAC was down 0.80 per cent. London’s FTSE too fell 1.30 per cent.