This drop mirrored losses in other Asian markets as investors grew wary due to the intensifying conflict in the Middle East.
At 11:50 am on Thursday, the BSE Sensex was down by 1,318 points (1.56 percent), trading at 82,948.23, while the Nifty50 declined by 396 points (1.53 percent) to 25,400.95.
The total market value of listed companies on the BSE fell by Rs 7.2 lakh crore, bringing it to Rs 467.67 lakh crore.
Investor anxiety heightened following Iran’s launch of ballistic missiles at Israel earlier in the week, sparking fears of disruptions in oil supplies from the region if the conflict worsens.
Consequently, oil prices edged up, negatively impacting oil-importing nations like India, where crude oil constitutes a large part of the import expenditure.
Among the Sensex's key stocks, Reliance Industries, HDFC Bank, ICICI Bank, M&M, L&T, and Bharti Airtel were the major decliners, while JSW Steel and Tata Steel bucked the trend by opening higher.
The Nifty Oil & Gas index saw an early loss of over 1.2 percent, largely driven by concerns about the escalating conflict in the Middle East.
Hindustan Petroleum, IOC, and GSPL were the biggest losers in the sector. Meanwhile, the India VIX, a measure of market volatility, surged by 8.9 percent to 13.06.