The Sensex fell 373.93 points, or 0.49%, to close at 76,570.35 on Tuesday, as a spike in oil prices rattled investor sentiment.
The Nifty50 dropped 141.35 points, or 0.59%, to end the session at 23,914.45, marking the third straight day of losses for the benchmark indices.
The decline followed overnight strikes exchanged between the US and Iran, which intensified fears of supply disruptions from the Strait of Hormuz and pushed Brent crude up 0.76% to $95.37 a barrel.
Nifty Auto was the worst-hit sector, falling 2%, with Nifty IT and Media also underperforming, while Nifty Oil and Gas, PSU Bank and Realty bucked the trend.
Eicher Motors, Wipro and Bajaj Auto were among the top losers on the Nifty50, as rising bond yields further weighed on risk appetite.
The US and Iran exchanged strikes overnight, intensifying fears of further supply disruptions from the Strait of Hormuz, a key global oil shipping route.
Brent crude rose 0.76% to $95.37 per barrel during the session, adding to inflation concerns among investors.
Nifty Auto was the worst-hit sectoral index, declining 2%, with Nifty IT and Nifty Media also underperforming during the session.
In contrast, Nifty Oil and Gas, PSU Bank and Realty indices outperformed, providing some counterbalance to the broader market decline.
Eicher Motors, Wipro and Bajaj Auto were among the top losers on the Nifty50 index during the session.
Broader markets also came under pressure, with the Nifty MidCap index ending 0.53% lower and the Nifty SmallCap index down 0.37%.
This marked the third straight session of losses for the benchmark indices, as rising bond yields further dented investor risk appetite.
Rising bond yields typically make fixed-income investments more attractive relative to equities, prompting some investors to shift allocations away from stocks.
Markets will be closely watching for further developments in the Middle East, given the direct link between regional tensions and global crude oil supply concerns.
Photo of the Bombay Stock Exchange building, Wikimedia Commons, CC BY 2.0
