The 30-share BSE index was trading 699.31 points or 1.69 per cent lower at 40,765.30. Similarly, the broader NSE Nifty cracked 209.50 points or 1.71 per cent to 12,017.15.
Bajaj Finance was the top loser in the Sensex pack, diving up to 4 per cent, followed by SBI, HDFC, Maruti, Asian Paints Hero MotoCorp and IndusInd Bank.
On the other hand, Titan and Tech Mahindra were trading in the green.
According to traders, domestic market witnessed heavy selloff as global stocks slumped after US President Donald Trump vowed "major retaliation" if Iran tries to avenge the killing of its key military commander Qasem Soleimani and doubled down on a threat to bomb Iranian cultural sites.
He also threatened to impose "very big sanctions" on Iraq if it follows through on a parliament vote calling for the expulsion of US troops based in the country.
Following the news Brent, oil prices surged nearly 3 per cent to USD 70.59.
Bourses in Hong Kong, Shanghai, Tokyo and Seoul were trading up to 2 per cent lower.
Meanwhile, the rupee depreciated 30 paise to 72.10 against the US dollar (intra-day). ANS ANS