Regional stock markets came under heavy selling pressure in the week’s opening trade amid rising fear of a trade war involving the United States and China ~ the two top global economies ~ after US President Mr Donald Trump over the weekend threatened to impose heavy tariff on imports of steel and aluminium into America. Analysts say the measure would disturb the global trade with disastrous fallout.

Besides the looming spectre of trade war, a sharp contraction in PMI or purchasing managers index in the services sector to 47.8 in February from 51.7 in January further roiled the sentiment in Dalal Street, triggering another spell of profit booking by traders.

The combination of external and internal negative cues virtually eclipsed the Bharatiya Janata Party’s commendable performance in three state elections in the North-east, say analysts.

The 30-share Sensitive Index of Bombay Stock Exchange and the 50-scrip Nifty of National Stock Exchange were down for the fourth session in a row as participants booked profit in metal, oil & gas, financial and auto segments.

The Sensex closed below 34,000-level at 33,746.78 points, registering a decline of 300.16 points or 0.88 per cent. The Nifty ended 0.95 per cent or 99.50 points down at 10,358.85 points. The Nifty Bank and the Nifty PSU Bank managed to pare their day’s losses on late short-covering as well as bargain buying by investors.

The Nifty Bank ended 0.34 per cent or 83.85 points down at 24,818.70 points. The Nifty PSU Bank ended in green, mainly on gain in SBI stock. The index closed at 3,023.20 points, up 1.75 points or 0.06 per cent. In the Sensex pack, six shares ended up and 25 were down.

For the Nifty, the advance-decline ratio stood at 8 versus 42. Analysts were expecting yet another negative start to equity trade today in line with other Asian markets as all eyes were on proposed trade talks between the US and China.

Amid volatility in recent weeks, foreign portfolio investors or FPIs were net sellers in stocks worth Rs 18,619.15 crore in February. Domestic institutional investors, on the other hand, stepped up buying selective shares on dips in February as they bought shares worth Rs 17,813.01 crore during the month in a big leap from their January’s investment of Rs 398.73 crore.

Analysts fear, if trade war becomes a reality, the market may see further withdrawal by FPIs as it would lead to spread of protectionism among world’s developed as well as emerging economies.

However, domestic brokers in Dalal Street see a comeback by benchmarks, citing continuing domestic inflows on increasing optimism over further improvement in earnings for January-March quarter (Q4) of fiscal 2017-18. They have based their expectations of better earnings on Q3 GDP at 7.2 per cent over-shooting all estimates.

However, fresh worries continue to haunt state-run lenders. Report credited to rating agency Icra suggests five more banks are on the verge of coming under the Reserve Bank of India’s Prompt Corrective Action or PCR as their net NPAs have exceeded six per cent as on December 2017.

Of the 21 PSBs, 11 are already under PCR which include BoI, Central Bank of India. The new PCR members are likely to be Canara bank, Union Bank of India, Punjab National Bank and Andhra Bank.

Top losers in the BSE benchmark included Tata Motors at Rs 352.15, down 5.04 per cent; Bajaj Auto at Rs 2,942.50, down 2.73 per cent; RIL at Rs 924.20, down 2.48 per cent and ONGC at Rs 185.50, down 2.14 per cent.