Benchmark indices fell sharply in trade on rising tensions in the Middle East, with the Sensex plunging almost 780 points, while the Nifty dived 231 points in trade. The Nifty was last trading at 11,991 points, while the Sensex was down 784 points in trade at 2:15 pm.
The real worry for investors was escalating tensions in the Middle East. The US President Donald Trump threatened to impose sanctions on Iraq, which drove oil prices higher, while Iran earlier threatened uranium enrichment.
Asian markets too fell sharply in trade with the the Japanese Nikkei falling as much as 475 points or 2 per cent.
Heavyweight stocks like HDFC, HDFC Bank and Reliance Industries dropped between 2 and 3 per cent, leading to a sharp fall in the indices.
Shares of Oil Marketing Companies fell sharply with Indian Oil, BPCl and HPCL losing heavy ground on worries over rising crude prices.
All the sector indices were deep in the red, with the biggest losers being those from the PSU banking space. Titan, Wipro and TCS were the only gainers in trade from the Nifty.
Shares in Bajaj Finance were down almost 4 per cent, after sharing quarterly updates.
Meanwhile, crude oil prices jumped in trade on worries of supply disruption. A rally in crude tends to impact India adversely, especially on the economic front.