Indian shares ended more than 1% lower on Monday, dragged by metal and energy stocks, while the country's move to slap retaliatory tariffs on certain US goods stoked fears of a trade tiff between the two countries.
The broader NSE index closed 1.28% lower at 11,672.15, while the benchmark BSE index was down 1.25% at 38,960.79. The indexes logged their worst closing levels since May 23.
Tata Steel shares fell 5.7%, while broader Nifty metal index shed 2.9%. Reliance Industries closed down 2.7%.
After falling as much as 1.4% in Monday's trade, NSE index closed above a support at 11,667.92, the 100% Fibonacci projection level of the correction from June 3 high to June 7 low(wave A). On Tuesday, the market may watch out if this level supports the index.
Below the current support, the Index also has a key support at 11,607, the 23.6% Fibonacci retracement level of the uptrend from Oct. 26, 2018 low to June 3 high.
India, the largest importer of US almonds, imposed higher retaliatory tariffs on 28 US products including almonds, apples and walnuts from Sunday. Total trade between the two countries stood at about $142.1 billion in 2018.
Higher Indian tariffs on US goods could impact growing political and security ties between the two nations.
"India putting retaliatory tariffs on US is leading to a fear that it might escalate into a trade war between the two countries," said Siddhartha Khemka, head of retail research at Motilal Oswal Securities. "Our economy is anyway struggling in terms of growth and any additional pressure in terms of export because of this could further put pressure on the economy," he said. Nifty energy index fell 1.4%, with Reliance Industries among the biggest drags. Reliance shares touched their lowest level in over four weeks, falling up to 2%.