Indian equity benchmarks ended their four-day rally on Tuesday, with the Sensex and Nifty 50 closing lower as investors booked profits amid rising crude oil prices.
The sell-off was driven by fresh military strikes between the US and Iran, which intensified supply disruption fears and pushed energy costs higher.
The Sensex dropped 104 points, or 0.13%, to end at 78,180.72, while the Nifty 50 shed 32 points, or 0.13%, to finish at 24,398.70.
The market reversal highlights the persistent vulnerability of emerging-market equities to geopolitical shocks in the energy sector.
As crude prices climb, the cost of imports rises, pressuring trade balances and inflation expectations in oil-dependent economies like India.
This dynamic has already begun to erode the recent upward momentum that had been fueled by hopes of easing global tensions.