After a brief relief rally in the previous session, driven by optimism over a possible end to the Iran conflict, Indian equities resumed their downtrend on Tuesday as investor sentiment turned cautious amid fresh geopolitical concerns.

The BSE Sensex plunged 1,490 points, or 2.04%, to 71,643.81 in early trade, slipping below the 72,000 mark after opening at 72,262.05. Similarly, the Nifty 50 dropped 453 points, or 2%, to 22,233.50, following a gap-down opening at 22,383.40.

Broader markets were hit harder, with the Nifty Midcap 100 and Nifty Smallcap 100 declining around 2.7% each. Market volatility also surged, with the India VIX rising over 5% to 26.27, indicating heightened uncertainty and nervousness among investors.

D-Street sentiment was dented after Donald Trump, in his first national address since the war began, signalled continued aggressive military action and warned that U.S. strikes on Iran would persist for the next few weeks, raising fears of further escalation rather than de-escalation.

Market sentiment was further weighed down by persistent selling from foreign portfolio investors (FPIs) and elevated crude oil prices, which are likely to widen India’s trade deficit and exert additional pressure on the rupee.

Banking, realty, pharma lead fall

Sectorally, the sell-off was widespread, with rate-sensitive and cyclical sectors bearing the brunt. Banking and financial stocks were among the top losers, with the Nifty PSU Bank falling more than 3.3%, while the Nifty Private Bank and Nifty Financial Services declined over 2% each.

Other major lowers included the Nifty Realty, Nifty Pharma, and Nifty Consumer Durables, all falling over 2-3%. The Nifty Auto and Nifty Metal also traded firmly in the red, while IT stocks showed relative resilience, with the Nifty IT declining just around 0.6%.

On the Sensex pack, all heavyweights were in red, barring HCLTech, with banking majors such as State Bank of India, Axis Bank, HDFC Bank, and ICICI Bank fell between 2% and 3%.

Among others, Reliance Industries declined over 1%, while IT majors Tata Consultancy Services and Infosys traded lower.

Other notable laggards included Sun Pharmaceutical Industries, InterGlobe Aviation, Asian Paints, and Mahindra & Mahindra, which declined up to 4–5%, reflecting widespread selling across sectors.

Asian markets fall on concerns about West Asia crisis

Asian markets declined sharply today as rising geopolitical tensions and a surge in crude oil prices dampened investor sentiment across the region. Japan’s Nikkei 225 fell 1.63%, while South Korea’s KOSPI led losses with a steep 3.63% drop.

Taiwan’s Taiwan Weighted Index slipped 1.45%, and Hong Kong’s Hang Seng declined 0.78%. China’s Shanghai Composite also edged lower by 0.45%. In Southeast Asia, Singapore’s Straits Times Index was down 0.71%, while Indonesia’s Jakarta Composite Index dropped 1.17%.

The broad-based sell-off came after oil prices surged more than 5%, climbing back above $105 per barrel, as Donald Trump warned that the United States would continue aggressive action against Iran.

The sharp rebound in crude, following a brief dip below $100, reignited concerns over inflation and economic stability, particularly for oil-importing Asian economies.

U.S. futures were down more than 0.9% following Trump’s remarks. In the overnight trade, the S&P 500 ended 0.7% higher, while the Dow Jones Industrial Average and the Nasdaq composite added 0.5% and 1.2%, respectively.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)