The market plunged on Monday, tracking weak global cues amid reports US could soon announce a new round of tariffs on Chinese imports, setting the stage for possible reprisals by Beijing. Measures announced by the government this past weekend, which are aimed at stemming rupee's fall and narrowing the current account deficit, failed to cheer investors. The Sensex ended below the psychologically important 38,000 mark.

The Sensex fell 505.13 points or 1.33% to settle at 37,585.51, its lowest closing level since 11 September 2018. The index fell 62.83 points, or 0.16% at the day's high of 38,027.81. The index fell 541.71 points, or 1.42% at the day's low of 37,548.93.

The Nifty 50 index fell 137.45 points or 1.19% to settle at 11,377.75, its lowest closing level since 11 September 2018. The index fell 50.25 points, or 0.44% at the day's high of 11,464.95. The index fell 148.30 points, or 1.29% at the day's low of 11,366.90.

Among secondary barometers, the BSE Mid-Cap index fell 0.76%. The BSE Small-Cap index fell 0.05%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1282 shares rose and 1441 shares fell. A total of 191 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Realty index (up 1.36%), the S&P BSE Power index (up 0.14%), the S&P BSE Utilities index (up 0.04%), the S&P BSE IT index (down 0.13%), the S&P BSE Teck index (down 0.18%), the S&P BSE Oil & Gas index (down 0.21%), the S&P BSE Telecom index (down 0.27%), the S&P BSE Metal index (down 0.29%), the S&P BSE Basic Materials index (down 0.48%), the S&P BSE Capital Goods index (down 0.67%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.7%), the S&P BSE Industrials index (down 0.74%), the S&P BSE Auto index (down 1%), the S&P BSE Bankex (down 1.08%), the S&P BSE Healthcare index (down 1.08%), the S&P BSE FMCG index (down 1.2%), the S&P BSE Consumer Durables index (down 1.25%) and the S&P BSE Energy index (down 1.3%), underperformed the Sensex. The S&P BSE Finance index fell 1.44%, outperforming the Sensex.

Private sector banks fell across the board. RBL Bank (down 2.59%), HDFC Bank (down 1.81%), Axis Bank (down 1.6%), Yes Bank (down 1.39%), City Union Bank (down 0.82%), ICICI Bank (down 0.82%), Kotak Mahindra Bank (down 0.61%) and Federal Bank (down 0.06%), edged lower. IndusInd Bank rose 0.07%.

Public sector banks were mixed. Syndicate Bank (up 3.15%), Andhra Bank (up 2.52%), Bank of Maharashtra (up 2.08%), Vijaya Bank (up 0.93%), United Bank of India (up 0.87%), Central Bank of India (up 0.52%), Bank of Baroda (up 0.41%), Punjab & Sind Bank (up 0.34%), Bank of India (up 0.21%), Punjab National Bank (up 0.18%) and Allahabad Bank (up 0.12%), edged higher. Dena Bank (down 0.62%), UCO Bank (down 0.76%), IDBI Bank (down 0.85%), Canara Bank (down 1.21%), Indian Bank (down 1.3%), Union Bank of India (down 1.55%) and State Bank of India (down 1.65%), edged lower.

Most realty shares rose. Anant Raj (up 6.37%), Indiabulls Real Estate (up 4.56%), Mahindra Lifespace Developers (up 2.14%), DLF (up 1.82%), Prestige Estates Projects (up 1.74%), Housing Development and Infrastructure (HDIL) (up 1.17%), Sobha (up 0.78%), Godrej Properties (up 0.65%), Parsvnath Developers (up 0.54%), Phoenix Mills (up 0.45%) and Oberoi Realty (up 0.27%), edged higher. Sunteck Realty (down 0.23%), Unitech (down 0.32%), Omaxe (down 0.39%), D B Realty (down 1.62%) and Peninsula Land (down 7.4%), edged lower.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 72.455, compared with its close of 71.86 during the previous trading session.

The Indian government late on Friday reportedly announced a slew of steps aimed at stemming a steep decline in the rupee, and it left the door open to announcing more measures. After an economic review meeting chaired by Prime Minister Narendra Modi, India's finance minister reportedly said the government plans to take measures to cut down "non-necessary" imports, ease overseas borrowing norms for the manufacturing sector and relax rules around banks raising masala bonds, or rupee-denominated overseas bonds. Jaitley said manufacturing entities will be permitted to make use of external commercial borrowings (ECBs) of up to $50 million with a minimum maturity of one year, down from three years earlier.

On the economic front, merchandise exports in August 2018 were $27.84 billion, as compared to $23.36 billion in August 2017, exhibiting a positive growth of 19.21%. In rupee terms, exports were Rs 1,93,624.74 crore in August 2018, as compared to Rs 1,49,398.90 crore in August 2017, registering a positive growth of 29.60%. Imports in August 2018 were $45.24 billion (Rs 3,14,597.54 crore), which was 25.41% higher in dollar terms and 36.34 % higher in rupee terms over imports of $36.07 billion (Rs 2,30,737.96 crore) in August 2017.

The trade deficit for August 2018 was estimated at $17.39 billion as against the deficit of $12.72 billion in August 2017. Taking merchandise and services together, overall trade deficit for April-August 2018-19 is estimated at $ 47.72 billion as compared to $38.95 billion in April-August 2017-18.

India's overall exports (merchandise and services combined) in April-August 2018-19 are estimated to be $221.83 billion, exhibiting a positive growth of 20.70% over the same period last year. Overall imports in April-August 2018-19 are estimated to be $269.54 billion, exhibiting a positive growth of 21.01% over the same period last year.

Overseas, European stocks traded lower Monday amid renewed fears over an escalating trade war between the world's two largest economies.

Asian shares were negative amid reports over the weekend that the US could be imposing new tariffs on $200 billion of Chinese goods as early as this week. According to reports, the new round of tariffs on Chinese goods was being readied ahead of the scheduled trade talks with Beijing, in line with an earlier report that said the White House was set to impose the tariffs at 10% instead of the earlier number of 25%. The media then followed up with another report on Sunday citing Chinese officials saying that Beijing could decline to participate in the proposed trade talks with the US if Washington goes ahead with imposing the additional tariffs on Chinese imports.

US stocks ended almost unchanged on Friday, though slight gains were enough to give the S&P 500 its fifth straight positive session.

On the data front, US retail sales rose a scant 0.1% in August, the government said Friday. Meanwhile, the import price index sank 0.6% in August, marking the second straight month and the biggest drop in 2-1/2 years for the cost of goods imported into the country, largely reflecting lower oil prices. A report on industrial production for August showed a rise of 0.4%, the Federal Reserve reported, representing the third monthly increase. Separately, the confidence of Americans in the US economy and their own well-being rose toward the end of summer and stood near a 14-year high. Business inventories rose 0.6% in July.

In the global commodities markets, Brent for November 2018 settlement was up 58 cents at $78.67 a barrel. The contract had fallen 9 cents, or 0.12% to settle at $78.09 a barrel during the previous trading session.