Indian stocks took a hit on Wednesday, with the Sensex dropping 550 points as concerns about elevated oil prices, US interest rates, Middle East conflict, and banking sector margins rattled investors. The BSE benchmark Sensex fell by 0.83% to close at 65,877 while the NSE Nifty dropped by 0.7% to end at 19,671.

High-weightage financials lost 1.3%, with significant declines in Bajaj Finance (2.85%) and Bajaj Finserv (over 2%). Nifty Bank also declined by 1.2%, with Axis Bank, HDFC Bank, ICICI Bank, IndusInd Bank, and Kotak Bank plunging between 1-1.5%. Despite a bearish outlook in the financial sector, Nifty Auto stocks ended higher led by Tata Motors (NYSE:TTM)’ 1.9% rise and slight increases in Maruti and M&M.

The more domestically focused smallcap and midcap sectors were not spared either, falling 0.9% and 0.34%, respectively. The market capitalization of all BSE-listed companies dropped by Rs 2.42 lakh crore amid bearish market breadth.

The downward trend follows disappointing Q2 results and modest revenue growth from IT service company Zensar Technologies. This added to the already tense atmosphere in the market caused by concerns over banking stocks such as HDFC Bank, Bajaj twins, and RIL.