PTC Web Desk: Indian stock markets witnessed heavy selling on Wednesday as investors turned cautious amid rising tensions between the United States and Iran, a jump in crude oil prices and weak global market cues.

By the afternoon, the BSE Sensex had fallen 1,122.46 points to 77,058.26, while the NSE Nifty dropped 342.60 points to 24,056.10. Selling was seen across most sectors, dragging the benchmark indices sharply lower.

Rising US-Iran tensions hit market sentiment

The latest fall in the market came after fresh military action by the United States against Iran, raising fears of a wider conflict in the Middle East. The situation has pushed global crude oil prices higher as investors worry about possible disruptions in oil supplies from the region.

Since India imports most of its crude oil, any sharp rise in prices increases the country's import bill and puts pressure on inflation. It can also raise costs for companies, affecting their profits.

Crude oil prices climb

Brent crude oil rose above 76 dollars per barrel after the latest developments in the Middle East. Higher fuel prices are generally seen as negative for the Indian economy because they increase transportation and production costs across industries.

Market experts said the rise in crude oil was one of the biggest reasons behind Wednesday's sharp decline.

Weak global markets add pressure

Indian markets also tracked weakness in global equities. Major US stock indices ended lower overnight, with technology shares leading the decline. Investors booked profits in several semiconductor companies, raising concerns that the recent rally driven by artificial intelligence (AI) may be losing momentum. The negative mood spread to Asian markets, which also traded lower during the day.

Foreign investors continue to buy Indian stocks

Despite Wednesday's decline, foreign institutional investors (FIIs) have continued buying Indian equities in recent sessions. On Tuesday, FIIs purchased shares worth Rs 393.19 crore, while domestic institutional investors (DIIs) sold equities worth Rs 383.43 crore.

Analysts believe India remains attractive for foreign investors because of its relatively stable economic outlook compared to several other Asian markets.