Kashmir issue also spooked investors’ sentiment after the authorities stepped up security at vital installations and in sensitive areas, suspended mobile internet services and either “arrested” or “detained” several leaders in fast-paced developments on Sunday night.

The 30-share index was trading 531.94 points or 1.43% lower at 36,586.28; and the broader Nifty fell 171.05 points, or 1.56%, to 10,826.30 in morning session.

In the Sensex pack, Yes Bank, Tata Motors, Vedanta, SBI, Tata Steel, Power Grid, ICICI Bank, ONGC, Reliance and Maruti, were among the major losers, falling up to 8.49%.

On the other hand, TCS, Infosys, Bharti Airtel and HDFC were trading in the green.

In the previous session, the 30-share BSE Sensex rose 99.90 points or 0.27% to settle at 37,118.22. Similarly, the broader NSE Nifty gained 17.35 points or 0.16% to end at 10,997.35.

On a net basis, foreign institutional investors sold equities worth ₹2,888.06 crore, provisional data available with stock exchanges showed on Friday.

“FPIs withdrew more than they invested as the U.S.-China trade war has started brewing again which is not helping investors’ sentiments,” said Harsh Jain, COO at Groww.

Further, “the announcement of rate cuts by Fed in the U.S. has evoked confused reactions and added to the uncertainty,” he added.

The Reserve Bank will hold its three-day policy meeting, beginning Monday (August 5).

It is widely expected to cut the benchmark interest rate for the fourth time in a row to boost the economy at time when key indicators are pointing towards a slowdown, experts said.

Elsewhere in Asia, Shanghai Composite Index, Hang Seng, Nikkei and Kospi were trading in the red in their respective early sessions, following intensifying trade war between the U.S. and China.

Equities on Wall Street too ended on a negative note on Friday last week.

Meanwhile, the rupee depreciated by 86 paise to 70.46 against the dollar (intra-day).

The global oil benchmark Brent crude futures were trading 1.18% lower at 61.16 per barrel.