Mumbai, May 6 (IANS): In line with global markets, Indian equities on Monday logged steep falls as US President Donald Trump threatened to impose fresh trade tariffs worth $200 billion on Chinese goods.

The US move is being seen as an unexpected and a major escalation in trade tensions between the two big economies.

"Indian markets opened gap down dragged down by escalation in US-China trade tensions. Markets later remained in a range before closing near their opening levels. Market volumes were lower than the recent average as buyers stayed away amidst tense times," said Deepak Jasani of HDFC Securities.

The fear index, or the 'India VIX', jumped over 10 per cent to 27.83, hitting its highest level in 52-weeks. The BSE Sensex closed 362.92 points, or 0.93 per cent, lower at 38,600.34 and the Nifty finished 114.00 points, or 0.97 per cent, lower at 11,598.25.

"Market slid as an unexpected threat to US-China trade tariffs influenced investors to book profit. A weak rupee and a mixed bag of quarterly result further impacted the sentiment, while consolidation in oil prices and 10-year yields are the positive triggers for the Indian market," said Vinod Nair, Head of Research, Geojit Financial Services.

"Any further escalation in trade tensions may impact the flow of foreign funds to the domestic market which may lead to sideways movement in the near term," he added.

Among the top Nifty50 losers were Tata Motors, Yes Bank, Titan and Zee Ltd, declining in the range of 4 to 7 per cent. Yes Bank fell after a downgrade by rating agency ICRA, while Titan came under selling pressure due to valuation concerns.

Tata Motors fell after reports that it could phase out small diesel cars from its portfolio as demand is expected to slow down after the implementation of the new BS-IV emission norms.

In contrast, state-run Bharat Petroleum Corporation gained the most as UK Brent oil prices eased to go below the $70 a barrel-mark.