The market declined sharply, extending yesterday's steep fall. Investors were nervous after US President Donald Trump imposed 10% tariffs on an additional $200 billion worth of Chinese imports, and warned of duties on more products if China took retaliatory action. Domestic shares spent most of the trading session in negative territory although the reaction was a little muted. However, selling pressure intensified in the last hour of trade.

The Sensex fell 294.84 points or 0.78% to settle at 37,290.67, its lowest closing level since 2 August 2018. The index rose 159.93 points, or 0.43% at the day's high of 37,745.44. The index fell 342.66 points, or 0.91% at the day's low of 37,242.85.

The Nifty 50 index fell 98.85 points or 0.87% to settle at 11,278.90, its lowest closing level since 2 August 2018. The index rose 33.70 points, or 0.30% at the day's high of 11,411.45. The index fell 108.80 points, or 0.96% at the day's low of 11,268.95.

Among secondary barometers, the BSE Mid-Cap index fell 1.49%. The BSE Small-Cap index fell 1.51%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On BSE, 881 shares rose and 1805 shares fell. A total of 162 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Realty index (down 3.13%), the S&P BSE Power index (down 2%), the S&P BSE Industrials index (down 1.77%), the S&P BSE Telecom index (down 1.75%), the S&P BSE Bankex (down 1.68%), the S&P BSE Utilities index (down 1.68%), the S&P BSE Metal index (down 1.49%), the S&P BSE Auto index (down 1.47%), the S&P BSE Finance index (down 1.42%), the S&P BSE Capital Goods index (down 1.36%), the S&P BSE Basic Materials index (down 1.31%), the S&P BSE Consumer Discretionary Goods & Services index (down 1.17%), the S&P BSE Oil & Gas index (down 1.08%), the S&P BSE Energy index (down 0.92%) and the S&P BSE Teck index (down 0.82%), underperformed the Sensex. The S&P BSE Healthcare index (down 0.72%), the S&P BSE IT index (down 0.7%), the S&P BSE Consumer Durables index (down 0.42%) and the S&P BSE FMCG index rose 0.86%), outperformed the Sensex.

Banks shares declined. Among private sector banks, Federal Bank (down 3.09%), Axis Bank (down 2.81%), ICICI Bank (down 2.07%), City Union Bank (down 1.84%), IndusInd Bank (down 1.13%), Kotak Mahindra Bank (down 1.11%) and RBL Bank (down 0.21%), edged lower. HDFC Bank (up 0.05%) and Yes Bank (up 1.43%), edged higher.

Among public sector banks, Union Bank of India (down 9.11%), Indian Bank (down 8.33%), Canara Bank (down 7.66%), Syndicate Bank (down 5.84%), Andhra Bank (down 5.08%), Punjab National Bank (down 4.46%), State Bank of India (down 4.06%), Bank of India (down 3.91%), IDBI Bank (down 3.02%), Central Bank of India (down 2.01%) and Allahabad Bank (down 1.11%), edged lower. Bank of Maharashtra (up 0.95%), United Bank of India (up 4.44%), Corporation Bank (up 6.19%), Punjab & Sind Bank (up 6.35%) and UCO Bank (up 6.98%), edged higher.

State-run Bank of Baroda slumped 16.03% after the government's decision to merge it with Dena Bank (up 19.75%) and Vijaya Bank (down 5.69%) failed to enthuse investors.

Bank of Baroda said it has received a communication from Ministry of Finance, Government of India that the Alternative Mechanism (AM) after consultation with Reserve Bank of India (RBI), has decided that Bank of Baroda, Vijaya Bank and Dena Bank may consider amalgamation of the three banks. Accordingly, a meeting of board of directors to consider the amalgamation will be convened by the bank shortly. The announcement was made during trading hours today, 18 September 2018.

Engineering and construction major Larsen & Toubro (L&T) fell 1.16%. The construction arm of L&T has won orders worth Rs 2048 crore across two business segments. The announcement was made during trading hours today, 18 September 2018.

FMCG shares rose on defensive buying. Bajaj Corp (up 7.18%), Jyothy Laboratories (up 5.21%), Hindustan Unilever (up 3.87%), Dabur India (up 2.09%), Colgate Palmolive (India) (up 1.40%), Nestle India (up 1.32%), Britannia Industries (up 0.68%), Godrej Consumer Products (up 0.66%) and Marico (up 0.29%), edged higher. GlaxoSmithKline Consumer Healthcare (down 0.23%), Tata Global Beverages (down 0.55%) and Procter & Gamble Hygiene & Health Care (down 0.9%), edged lower.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 72.715, compared with its close of 72.495 during the previous trading session.

Overseas, European shares were trading higher. Asian shares ended mixed after the Trump administration decided to impose 10% tariffs on $200 billion worth of Chinese imports. US stocks closed lower Monday, with the S&P 500 and the Dow snapping multi-day win streaks.

President Donald Trump will impose 10% tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25% at the end of the year, according to a Monday announcement. The White House removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals and other products such as bicycle helmets and high chairs. Beijing has already warned that it will retaliate against the measures.

The US has already levied tariffs on $50 billion worth of Chinese products. Beijing responded with measures targeting $50 billion on American goods, raising fears about damage to the US farm industry. Earlier this month, reports suggested that the US was seeking to restart trade talks with China.

Meanwhile in the US, the New York Fed's Empire State index fell 7 points to 19 in September.

In the global commodities markets, Brent for November 2018 settlement was up $1.25 a barrel at $79.30 a barrel. The contract had fallen 4 cents, or 0.05% to settle at $78.05 a barrel during the previous trading session.

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