The key domestic indices continued to trade with sharp losses in morning trade, tracking weak global cues amid persistent uncertainty over the de-escalation of Middle East tensions and renewed concerns about inflationary pressures. Investor sentiment remained cautious due to the lack of clarity on the reopening of the Strait of Hormuz. The Nifty hovered around the 23,000 level.

PSU bank shares declined after advancing in the past two trading sessions.

At 10:25 IST, the barometer index, the S&P BSE Sensex tumbled 963.23 points or 1.28% to 74,307.96. The Nifty 50 index declined 297.70 points or 1.28% to 23008.75.

The broader market underperformed the frontline indices. The BSE 150 MidCap Index fell 1.801% and the BSE 250 SmallCap Index shed 1.82%.

The market breadth was weak. On the BSE, 910 shares rose and 2,988 shares fell. A total of 185 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term rallied 8.34% to 26.70.

The rupee fell to a record low of 94.2700 against the U.S. dollar, compared with its previous close of 93.9600 amid ongoing West Asia conflict.

US-Iran Warfare

As the Middle East conflict continues without clarity, uncertainty remains a key concern for investors.

According to media reports, U.S. President Donald Trump has decided to extend the pause on potential strikes targeting Iran's energy infrastructure into April, stating that the decision was taken at Tehran's 'request.' However, subsequent media reports suggested that Iran had not formally sought any such pause.

Meanwhile, Iran is said to have rejected a 15-point proposal put forward by the United States and instead presented its own set of conditions. These reportedly include assurances that the U.S. and Israel would not resume military actions against Iran, along with recognition of Iran's control over the Strait of Hormuz.

Buzzing Index:

The Nifty PSU Bank index dropped 2.80% to 8,340.80. The index jumped 4.24% in the past two consecutive trading sessions.

Bank of Baroda (down 3.67%), Canara Bank (down 3.59%), Union Bank of India (down 3.34%), Punjab National Bank (down 3.25%), Bank of India (down 2.92%), Indian Bank (down 2.92%), UCO Bank (down 2.84%), Central Bank of India (down 2.7%), Punjab & Sind Bank (down 2.46%) and Bank of Maharashtra (down 2.37%) declined.

Stocks in Spotlight:

Azad Engineering rose 2.97% after the company signed an 8-year long-term contract and price agreement with Mitsubishi Heavy Industries (MHI), Japan, to supply complex hot-section nozzle vane segments for gas turbine engines.

Concord Control Systems rose 0.16% after the company announced that its wholly owned subsidiary, Advanced Rail Controls, has secured an order worth Rs 84.68 crore from Indian Railways for the supply of a loco wireless control system.

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