Indian equity markets suffered their steepest decline since March on Wednesday, with the benchmark Nifty 50 index falling more than 2% to 23,882.
The sell-off was driven by a resurgence of geopolitical tensions in the Middle East, following reports that the United States and Iran have resumed military attacks.
The escalation triggered a broad risk-off response, erasing recent gains across nearly all sectors.
The market reaction was particularly severe in the energy and information technology segments.
Oil marketing companies faced renewed pressure as crude oil prices surged, squeezing refining margins.
This follows a sharp decline in the sector earlier in the week, where Indian Oil Corporation and other major refiners had already posted significant losses due to rising input costs.