Benchmark Sensex tanked 1,235 points to settle at more than seven-month low due to an across-the-board selloff triggered by global trade war worries after US President Donald Trump announced tariffs on neighbouring countries on his inauguration day.

The 30-share BSE Sensex plummeted 1,235.08 points or 1.60 per cent to settle at 75,838.36 dragged by losses in ICICI Bank and Reliance Industries. During the day, the BSE benchmark plummeted 1,431.57 points or 1.85 per cent to hit an intraday low of 75,641.87.

The broader NSE Nifty plunged 320.10 points or 1.37 per cent to close at 23,024.65. In the intraday trade, the NSE Nifty plunged 367.9 points or 1.57 per cent to 22,976.85.

"Domestic markets experienced a significant decline today, with heightened volatility, followed by Trump's announcement of trade tariffs on neighbouring countries on his inauguration day, adding uncertainty into global markets. The weak recovery in the ongoing Q3 earnings, coupled with a depreciating INR, are likely to prompt further outflows from FIIs," Vinod Nair, Head of Research, Geojit Financial Services said.

Among Sensex shares, Zomato, NTPC, Adani Ports, ICICI Bank, State Bank of India, Reliance Industries, Mahindra & Mahindra, Bajaj Finance, Tech Mahindra and Axis Bank were the major laggards.

UltraTech Cement and HCL Technologies were the only gainers.

European markets were trading higher on Tuesday.

In Asian markets, Tokyo and Hong Kong ended higher, while Shanghai and Seoul settled on a flat note on Tuesday. US markets were closed on Monday on the occasion of Martin Luther King Jr Day.

Global oil benchmark Brent crude slipped 0.76 per cent to USD 79.54 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,336.54 crore on Monday, according to exchange data.

On Monday, the 30-share BSE Sensex jumped 454.11 points to settle at 77,073.44 and NSE Nifty climbed 141.55 points to close at 23,344.75.