The BSE Sensex settled at 77,328.19, down 516.33 points or 0.66%, while the Nifty 50 closed at 24,176.15, falling 150.50 points or 0.62%. The top gainers on Nifty 50 included Titan Company, Apollo Hospital, and Asian Paints, while the top losers were SBI, Coal India Ltd, and HDFC Bank.

Market experts attributed the decline to escalating US-Iran tensions and fading hopes of a ceasefire, which prompted investors to turn cautious and book profits across sectors. Vinod Nair, head of research at Geojit Investments, said that crude oil prices stabilizing around $100 per barrel and softer US bond yields provided some support to overall market sentiment and the rupee.

Sectoral trends remained mixed, with the Nifty IT index emerging as one of the top gainers, rising 1.21%. The Nifty PSU Bank index, however, declined more than 3%, making it the worst-performing sectoral index of the day.

The outlook for the markets remains cautious, with investors focusing on opportunities in mid- and small-cap stocks amid expectations of favorable corporate earnings and relatively attractive valuations. The next trading session is expected to be influenced by global sentiment and developments in the US-Iran tensions.