Mumbai, June 13 : The Indian benchmark indices opened sharply lower on Friday as tensions escalated between Israel and Iran. Heaving selling was seen in the auto, IT, Financial service and PSU Bank sectors in the early trade.

At around 9.33 am, Sensex was trading 896.5 points or 1.10 per cent down at 80,795.44 while the Nifty declined 278.5 point or 1.12 per cent at 24,609.70

Nifty Bank was down 633.80 points or 1.13 per cent at 55,448.75 The Nifty Midcap 100 index was trading at 57,836.95 after dropping 603.90 points or 1.03 per cent. Nifty Smallcap 100 index was at 18,272.30 after declining 192.75 points or 1.04 per cent.

Analysts said that the economic consequences of this Israeli strike can be profound if the attack and counterattack by Iran lingers long. Israel has declared that the operation will last several days.

'The impact on the market will depend on how long the conflict lingers. In the near term the market will be in a risk-off mode. Sectors that use oil derivatives as inputs like aviation, paints, adhesives and tyres will be hit hard. Oil producers like ONGC and Oil India will remain resilient,' explained Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

According to analysts, the Nifty fell over a percent yesterday, as geopolitical tensions in the Middle East showed signs of erupting. As of this morning, Israel has launched pre-emptive strikes on Iran and that's led to a broad-based risk-off across markets.

"Technically, on the Nifty, we have been warning that Wednesday's "buyer rejection" candle immediately occurring after the bearish "upside gap two crows pattern" earlier in the week was an indication of caution creeping in," said Akshay Chinchalkar, Head of Research of Axis Securities.

Meanwhile, in the Sensex pack, Tata Motors, L&T, PowerGrid, Kotak Mahindra Bank, SBI, Titan and Infosys were the top losers.

In the Asian markets, Hong Kong, Bangkok, Jakarta, Japan, Seoul and China were trading in red.

In the last trading session, Dow Jones in the US closed at 42,967.62, up 101.85 points, or 0.24 per cent. The S&P 500 ended with a gain of 23.02 points, or 0.38 per cent, at 6,045.26 and the Nasdaq closed at 19,662.49, up 46.61 points, or 0.24 per cent.

The foreign institutional investors (FIIs) extended their selling on the second day as they sold equities worth Rs 3,831.42 crore on June 12, domestic institutional investors (DIIs) bought equities of Rs 9,393.85 crore on the same day.

/IANS