The Indian equity markets continued their downward trend, with the Sensex losing about 3,400 points since the beginning of the month, significantly reversing April's 7% recovery. On Tuesday, the Nifty index fell nearly 2%, dropping below the 23,400-mark, while broader market indices like the Nifty Midcap 100 and Nifty Smallcap 100 saw declines of 2.5% and 3.2%, respectively. Analysts warn that without progress in geopolitical negotiations, volatility in domestic equities is likely to continue. The surge in Brent crude oil prices to $107.4 per barrel, coupled with stalled US-Iran talks, has led to foreign institutional investors maintaining a sell-off stance. The Indian rupee has also reached a record low of 95.62 against the dollar, raising concerns about inflation and the country's forex reserves. Sector-wise, the IT and Realty sectors were the hardest hit, with the Nifty IT Index declining over 3% due to macroeconomic pressures and fears of AI-driven pricing disruptions. Analysts suggest that the Nifty is nearing a critical support level at 23,150, with previous resistance at 23,800. The ongoing geopolitical tensions in West Asia are keeping investors cautious, leading to sustained selling across financial markets. Despite these challenges, some analysts see potential opportunities in defensive sectors like healthcare and energy, depending on future geopolitical developments.