India's volatility index (VIX) rose to a one-month high on Monday as escalating US-China trade woes and tensions in Jammu and Kashmir have dampened market sentiment. The India VIX jumped 16.2 percent to a high of 17.6 in early trading today. The BSE Sensex was down 567 points, or 1.53 percent, at 36,551.10 and NSE's Nifty 50 traded 174.75 points, or 1.59 percent, lower at 10,822.60 as of 10.13 AM.

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Asian stocks have seen their steepest daily fall in nine months and were trading at six-month lows after US President Donald Trump had last week announced additional tariffs on imports of Chinese goods.

Moreover, the government overnight stepped up security in the Jammu and Kashmir region amid heightened terror threat and a flare-up of hostilities with Pakistan along the Line of Control, said state authorities. Restrictions and night curfews were imposed in several districts of the Valley. The government imposed restrictions under Section 144 of the CrPC in Srinagar district with effect from Sunday midnight as a precautionary measure, officials said.

Indian benchmark indices have witnessed heavy selloffs in the last one month after finance minister Nirmala Sitharaman announced several proposals in the Budget 2019 such as a hike in income tax surcharge for FPIs and a buyback tax.

FPIs have withdrawn a net amount of Rs 2,881 crore from the capital markets in the first two sessions of August, reported PTI. According to latest depositories data, FPIs pulled out a net sum of Rs 2,632.58 crore from equities and Rs 248.52 crore from the debt segment during August 1-2, taking the cumulative net outflow to Rs 2,881.10 crore.

Moreover, poor auto sales data for the month of July on the back of liquidity constraint at NBFCs and disappointing June-quarter corporate earnings have also weighed on the markets.

First Published:Aug 5, 2019 10:21 AM IST