MUMBAI: Market benchmark indices Sensex and Nifty declined in early trade on Tuesday dragged by a sharp rally in crude oil prices due to the renewed flare-up in West Asia.
Fresh foreign fund outflows and a weak trend in global peers also put pressure on the markets.
The 30-share BSE Sensex dropped 552.99 points to 77,063.41 in early trade. The 50-share NSE Nifty declined 160.45 points to 24,050.55.
From the Sensex pack, InterGlobe Aviation, HCL Tech, Bajaj Finance, Mahindra & Mahindra, UltraTech Cement and Larsen & Toubro were the biggest laggards.
Bharti Airtel, Tata Consultancy Services, Adani Ports and Tata Steel were among the winners.
Brent crude, the global oil benchmark, quoted 1.63 per cent higher at USD 84.60 per barrel.
"There are some headwinds blowing again which might impact the Indian market in the near-term. The escalation of US-Iran conflict has pushed Brent crude to USD 84. If this spike continues it will again start impacting India's macros," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
In Asian markets, South Korea's Kospi traded 3.71 per cent lower. Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index were also quoting lower.
US markets ended in negative territory on Monday.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,062.27 crore on Monday, according to exchange data.
On Monday, the Sensex went up by 47.01 points, or 0.06 per cent, to settle at 77,616.40. The Nifty eked out a marginal gain of 4.10 points, or 0.02 per cent, to end at 24,211.