Mumbai, May 8 Indian stock markets traded on a cautious note Friday, with benchmark indices declining 0.7 per cent each in the morning session as renewed hostilities between the United States and Iran strained a fragile ceasefire and rattled investor sentiment globally.
Sensex fell as much as 0.71 per cent or over 500 points to hit an intraday low of 77,291.72 in early trade, while Nifty slipped by 168 points or 0.69 per cent to 24,158.15.
Among sectoral indices, Nifty Private Bank, Nifty PSU Bank, Nifty Auto, and Nifty Oil & Gas were the top losers.
Key laggards in the Nifty pack included HDFC Bank, Axis Bank, ICICI Bank, Mahindra & Mahindra, Tata Motors, Maruti Suzuki, Eicher Motors, Shriram Finance, and Eternal.
However, Nifty IT, Nifty Chemicals, Nifty Pharma, and Nifty Healthcare bucked the trend and posted gains.
A market expert noted that the "escalation-de-escalation drama" in West Asia continues to drive volatility in crude oil prices.
The expert also highlighted a notable divergence in global market performance.
"Despite this geopolitical tension, some markets are doing extremely well while others are performing poorly. An important trend in India is the outperformance of the broader market, the Nifty Midcap index is now at a record high, despite elevated valuations," the expert said.
On the geopolitical front, Iran accused Washington of violating the month-long ceasefire, while the US maintained that its strikes were retaliatory, triggered by Iranian forces firing on American naval vessels transiting the Strait on Thursday.
Iran's military said US forces targeted an Iranian oil tanker, a second ship, and civilian areas in the strait and on the mainland.
Meanwhile, US President Donald Trump told reporters that the ceasefire remained in effect, as Washington awaited Tehran's response to its latest peace proposal.
Oil prices surged on the back of the renewed tensions. International benchmark Brent crude jumped 2.82 per cent to $102.89 per barrel, while US West Texas Intermediate (WTI) advanced 4 per cent to $98.64 per barrel.
Asian equities were broadly under pressure, with the Nikkei, Hang Seng, and KOSPI each trading up to 1 per cent lower.
Overnight on Wall Street, the S&P 500 closed 0.38 per cent lower, while the Nasdaq ended down 0.13 per cent.
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