Indian equity markets traded lower in early trade on Thursday, with both the Sensex and Nifty witnessing selling pressure amid escalating geopolitical tensions in West Asia and persistent foreign institutional investor (FII) outflows.

At around 9:20 a.m., the BSE Sensex declined 254.71 points, or 0.34%, to 73,728.47, while the NSE Nifty 50 fell 82.80 points, or 0.36%, to 23,132.15.

Market sentiment weakened after the United States reportedly carried out fresh strikes on multiple targets in Iran, intensifying geopolitical concerns in the region. The development raised fears of supply disruptions and broader instability, prompting investors to reduce exposure to risk assets globally.

Crude oil prices also moved sharply higher following the escalation. Brent crude futures rose 1.7% to approximately $94.7 per barrel, increasing concerns over inflationary pressures and the potential impact on energy-importing economies such as India.

Adding to the pressure, foreign institutional investors remained net sellers in the Indian market. FIIs sold equities worth Rs 2,124.98 crore on Wednesday, extending the recent trend of overseas fund outflows.

From a technical perspective, Anand James, Chief Market Strategist at Geojit Investments, noted that Nifty's failure to sustain gains in the 23,350–23,500 zone has weakened bullish momentum. According to him, the index may now witness a decline towards the 22,962 or 22,800 levels. He added that any recovery attempt is likely to face resistance near 23,257, while a move above 23,350 would be required to negate the current bearish outlook.