Stock market benchmark indices went into a tailspin in early trade on Monday, with the Sensex and Nifty crashing over 5 per cent, mirroring a sharp fall in global equities, after US President Donald Trump's tariff hikes and retaliation from China fanned fears that a full-blown trade war will impact economic growth across the globe.

The 30-share BSE benchmark Sensex crashed 3,939.68 points or 5.22 per cent to 71,425.01 in early trade. The NSE Nifty tumbled 1,160.8 points or 5.06 per cent to 21,743.65.

All the Sensex firms were trading in the negative territory. Tata Steel dropped over 8 per cent, followed by Tata Motors which cracked more than 7 per cent. HCL Technologies, Tech Mahindra, Infosys, Larsen & Toubro, Tata Consultancy Services and Reliance Industries were the other big laggards.

In Asian markets, Hong Kong's Hang Seng tanked nearly 11 per cent, Tokyo's Nikkei 225 plunged nearly 7 per cent, Shanghai SSE Composite index dropped over 6 per cent and South Korea's Kospi index sank 5 per cent.

US markets ended sharply lower on Friday. The S&P 500 plummeted 5.97 per cent, Nasdaq composite slumped 5.82 per cent and the Dow tumbled 5.50 per cent on Friday.

"Both China and Japan index declined by 10 per cent and 8 per cent, respectively. This escalates the stakes in the ongoing trade war and raises concerns about a potential global recession that could affect everyone. On Friday, the US S&P 500 dropped by 6 per cent, and the Dow Jones fell more than 2,000 points, marking its worst week since the COVID-19 crisis. This came after China announced it would impose reciprocal 34 per cent tariffs on all US imports starting April 10," Vikas Jain, Head of Research at Reliance Securities, said.

The sharp increase in tariffs by both the US and China could lead to higher inflation, slower global growth, and intensify trade tensions, he added.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,483.98 crore on Friday, according to exchange data.

Global oil benchmark Brent crude dropped 2.74 per cent to USD 63.78 a barrel.

On Friday, the Sensex tumbled 930.67 points or 1.22 per cent to settle at 75,364.69. The Nifty declined 345.65 points or 1.49 per cent to close at 22,904.45.

Last week, the Sensex tanked 2,050.23 points or 2.64 per cent, while the NSE Nifty declined 614.8 points or 2.61 per cent.