The S&P BSE Sensex plunged over 300 points on Wednesday after China has announced new tariffs on 106 US products, which include soybeans, cars, and whiskey.

After two successive days of buying, bears clawed back on D-Street and pushed benchmark indices below key support levels. The domestic equity market wiped off Rs 1.2 lakh crore in investor wealth on Wednesday.

The market capitalisation of BSE-listed companies plunged to Rs 144.13 lakh crore today from Rs 145.33 lakh crore recorded in the previous session.

China on Wednesday issued a $50 billion list of US goods including soybeans and aircraft targeted for possible retaliation in an escalating technology dispute with Washington that companies worry could set back the global economic recovery, said an AP report.

Apart from global overhang, expectations remain muted for the RBI policy announcement scheduled on Thursday, with no rate change largely anticipated. Sectorally banks underperformed in trade today, giving away most of the gains accumulated over the previous two sessions.

The Nifty Bank index lost nearly 400 points while the Nifty50 slipped more than 100 points as all sectoral indices are in the red barring Auto. Banks remain under pressure with Nifty bank slipping 400 points. Financials drag Nifty by over 50 percent.

Only 8 Nifty stocks closed in the green; Tata Motors and Eicher top gainers. Market breadth slipped in favour of declines. The advance-decline ratio at 3:4.

The Dow Jones futures are down 2 percent, indicating negative opening on Wall Street later today.

The Nifty50 has wiped out most of the gains made in the last two trading sessions post today’s fall. The index closed 116 points lower or 1.14 percent at 10,128.40\.

The S&P BSE Sensex closed above its crucial psychological support level of 33000 after breaching in a trade earlier today. The index closed 351 points lower or 1.05 percent at 33,019\.

On the sectoral front, the S&P BSE Metal index lost nearly 3 percent, followed by BSE Consumer Durable which saw a fall of 2.5 percent, and Capital Goods index which fell nearly 2 percent.

The fall in the S&P BSE Sensex was led by losses in HDFC Bank, HDFC, L&T, Infosys, and Kotak Mahindra Bank. On the other hand, Tata Motors rose 3.4 percent, followed by Tata Motors DVR which gained 2.6 percent.