In contrast, IT and healthcare stocks managed to trade in the green, offering some support to the indices.
Amid the decline, investor wealth worth over ₹3 lakh crore was eroded during the session.
Among gainers, the Nifty IT index showed resilience ahead of a key AI summit featuring global leaders such as Mukesh Ambani, Sam Altman and Rishi Sunak.
However, select IT names like Persistent Systems and Mphasis continued to face pressure.
Volume-led gains were seen in Tata Investment Corporation, Nitin Spinners and NDL Ventures.
MCX gained after withdrawing the additional margin requirements on gold and silver that were imposed on February 5 and 6. TIL was also in focus as its board is set to meet on February 23 to consider a fund raise.
On the losing side, the Nifty Realty index was the top sectoral laggard, with stocks such as Lodha Group and The Phoenix Mills declining sharply.The Nifty PSU Bank index also came under pressure after rallying over the previous three sessions.
The sharp fall in markets was largely attributed to escalating geopolitical tensions. Concerns resurfaced over a potential US-Iran escalation, as the two nations are yet to reach a nuclear agreement.
Reports of possible US military intervention in Iran and temporary disruptions in parts of the Strait of Hormuz added to market anxiety.
Iran and Russia were also scheduled to conduct joint naval drills in the Sea of Oman and the northern Indian Ocean on Thursday. Meanwhile, Ukraine-Russia talks in Geneva ended without a breakthrough, further dampening sentiment.
Oil prices extended gains after surging in the previous session, as investors factored in potential supply disruptions. Crude oil prices rose over 4% to trade above $70 per barrel, while US heating oil prices climbed 5%.
On the technical front, SAMCO Securities said immediate support for the Nifty is placed in the 25,700 to 25,660 zone. On the upside, the 26,000 to 26,050 range remains a key resistance cluster.
A sustained move above 26,000 could pave the way toward the upper channel band.
Anand James, Chief Market Strategist at Geojit Investments Ltd, said the index may attempt a move toward 25,900 and possibly 26,050, but sustaining momentum above those levels remains uncertain.
He added that the downside could extend toward 25,728 if weakness persists.
