The benchmark index extended its early losses of over 500 points to end the day deep in the red, as investors grew concerned over the security of shipping through the strategically vital Strait of Hormuz.
The NSE Nifty 50 also tumbled more than 500 points to settle below the 23,900 mark.
Oil prices fuel market jitters
Markets came under pressure from the opening bell as crude oil prices surged amid renewed geopolitical uncertainty in the Middle East.
The spike in oil prices and fears of potential disruption to global energy supplies weighed heavily on investor sentiment, triggering broad-based selling across sectors.
Trump says ceasefire 'over'
Adding to the uncertainty, US President Donald Trump declared that the ceasefire between the United States and Iran had effectively ended.
"To me, I think it's over. I don't want to deal with them... They're scum. They're sick people," Trump told reporters.
His remarks intensified concerns over a possible escalation of the conflict, prompting investors worldwide to shift towards safer assets while equity markets remained under pressure.