Equity benchmark Sensex tumbled 1,053 points to close below the 71,000 level on Tuesday, dragged down by index heavyweights HDFC Bank, Reliance Industries and SBI amid escalating tensions in the Middle East.

Concerns over subdued quarterly performance by corporates triggered selling pressure in most of the counters, according to traders.

After opening with gains of nearly 450 points, the 30-share BSE Sensex fell 1,053.10 points or 1.47 per cent to settle at 70,370.55. The index hit the lowest intraday level of 70,234.55. It also touched an intraday high of 72,039.20.

Broader Nifty also declined 330.15 points or 1.53 per cent to close at 21,241.65.

"The market witnessed a continuous decline today, abruptly turning negative despite a positive start, mainly due to substantial selling in heavyweight sectors, particularly finance.

"Selling by FIIs due to reasons like high valuation and mixed results for the earnings season so far, along with recent escalations in tensions in the Middle East and the Red Sea, prompted the investors to book profit from the recent rally. Going forward, markets are likely to witness stock-specific actions during the ongoing earnings season," said Vinod Nair, Head of Research, Geojit Financial Services.

Among the Sensex firms, IndusInd Bank was the biggest loser and fell 6.13 per cent, followed by SBI (3.99 pc), Hindustan Unilever (3.82 pc), Axis Bank (3.41 pc) and HDFC Bank (3.23 pc).

In contrast, Sun Pharma, Bharti Airtel, ICICI Bank and PowerGrid defied the trend and closed with gains of up to 3.67 per cent. TCS and Bajaj Finserve were the other gainers.

Shares of Zee Entertainment Enterprises Ltd (ZEEL) nosedived up to 33 per cent on Tuesday after Sony called off the proposed USD 10 billion merger of its India unit with the media group. Meanwhile, private sector Axis Bank on Tuesday reported a 4 per cent rise in standalone net profit at Rs 6,071 crore in the third quarter ended December 2023.

The S&P BSE MidCap fell 2.95 per cent to close at 37,247.84 and the midcap index settled 2.79 per cent lower at 43,378.40.

All the sectoral indices except healthcare settled with losses.

Realty and services indices fell the most by 5.46 per cent and 4.06 per cent, respectively. While metal declined by 3.97 per cent, oil & gas lowered by 3.96 per cent and energy went down by 3.70 per cent. Commodities, FMCG, financial services and capital goods were other laggards.

On the other hand, the healthcare index rose 1.02 per cent.

"Global sentiments turned cautious after Fitch Group statement that South Asian economies would be most affected, amid rising hostilities in the Red Sea due to Houthi attacks and India’s economic forecast faces a significant risk on account of a prolonged spell of disruptions," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

In Asia, Hong Kong's Hang Seng closed with a sharp gain of 2.63 per cent, and China's Shanghai Composite increased by 0.52 per cent. Japan's Nikkei 225 fell 0.8 per cent.

European markets were trading lower on Tuesday, with Germany's DAX down 0.09 per cent and the CAC 40 of France losing 0.16 per cent. London's FTSE 100 also declined 0.13 per cent.

In the US markets, the Dow, S&P 500 and Nasdaq closed with gains of up to 0.36 per cent on Monday.

"BoJ (Bank of Japan) followed China and kept interest rates unchanged. Now investors are awaiting US GDP data due late today along with the ECB rate decision due later this week. On the domestic front, this week is a truncated week with just three trading days.

"Given weak global cues and mixed set of earnings released so far, the market is likely to consolidate and may drop a little further till the next set of fresh positive triggers," Khemka said.

The domestic equity market was closed on January 22 due to the consecration ceremony in Ayodhya, while NSE and BSE held normal trading sessions on Saturday.

On Saturday, the 30-share BSE Sensex fell 259.58 points or 0.36 per cent to settle at 71,423.65. The Nifty declined 50.60 points or 0.23 per cent to close at 21,571.80.

Meanwhile, global oil benchmark Brent crude declined 0.40 per cent to USD 79.74 a barrel on Tuesday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 545.58 crore on Saturday, according to exchange data.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.