The Indian stock market slipped into the deep red on Wednesday, with Sensex and Nifty falling around 1% briefly before recovering some losses as escalating US-Iran tensions, soaring oil prices and other factors spooked investors.After opening, Sensex dropped over 750 points to fall below 76,200 while Nifty 50 plunged over 200 points to slip below 23,800 level in the morning. The sharp drop in the stock market wiped off nearly Rs 5 lakh crore from the total market capitalisation of BSE within minutes from opening, dragging it down to Rs 488 lakh crore. The market however recovered some losses following the closing auction session (CAS), with Sensex closing 374 points lower at 76,570 and Nifty 50 ending 141 points lower at 23,914 on Wednesday.Asian Paints, HDFC Bank and M&M shares dropped around 2% each to lead losses on Sensex, while HCL Tech, Bharat Electronics, Infosys, SBI and IndiGo shares fell over 1% each. Bucking the trend, Adani Ports, Bajaj Finserv and Power Grid shares rose 1-2% to lead gains on the benchmark index. The broader markets also dropped, with Nifty Midcap 100 and Nifty Smallcap 100 falling up to 0.5%. Among the sectors, Nifty Auto was the top loser, crashing nearly 2%, while Nifty IT dropped more than 1%. The overall market breadth turned negative, with NSE seeing 2,073 declines against 1,445 advances, while 112 stocks remained unchanged.Here are the 5 key factors pushing market down today.1) Iran-US conflict escalatesUS and Iran exchanged fresh strikes overnight, further dampening hopes for the raging conflict in the oil-rich Middle East coming to a conclusion. The US said it had launched a series of airstrikes against targets in Iran, prompting a ​response from Tehran. This marks one of the most serious escalations of the conflict between the two countries in weeks.The Islamic Revolutionary Guard ​Corps (IRGC) meanwhile said the American attacks would further restrict traffic through the Strait of Hormuz, a critical waterway that carried about one-fifth of the global oil consumed before the conflict and which Iran has effectively closed ​to commercial shipping. It also said it has targeted a US military base ​in Jordan with ballistic missiles that killed a large ​number of American forces, while Iranian state media reported a large-scale drone attack on a US base in Bahrain in response.2) Oil prices soar above $95/barrelAs a result of the fresh escalation in the Middle East conflict, oil prices sharply soared overnight, marking the largest ‌gain since late July. Brent crude futures jumped above $95 per barrel, while WTI Crude futures were trading close to $91 per barrel."The ⁠oil market is no longer pricing just the risk of war; it is increasingly pricing the cost of an unresolved war," Reuters quoted Priyanka Sachdeva, Phillip Nova's head of market insights. "Until there is clear evidence that ​negotiations can produce a lasting resolution and that normal oil flows through the Strait are returning, the risk premium in crude is likely to remain elevated."3) Rising bond yieldsGlobal bond yields continued to soar, raising borrowing costs to multi-decade highs ​as the Middle East conflict pushed oil ​prices higher, spiking investor fears about inflation and ballooning government debt. The yield on 10-year US Treasury notes rose to a near three-year high of 4.81%, and a further climb toward 5% is likely to unsettle ‌already jittery stock markets.Japan's ⁠10-year yield soared to a 30-year high above 3%. Australia's 10-year government bond yields rose to 5.198%, their highest level in over 15 years. “The big threat is the rising bond yields in the US. The macro construct in the US indicates further hardening of the bond yields. If the 10-year yield touches 5% that has the potential to trigger a big correction in equity markets globally. Therefore, this is the macro indicator to watch closely,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.Also read | Why Japan's 30-year high bond yields should worry Indian stock market investors4) Global market crashThe bear attack on Dalal Street follows an overall negative sentiment in global markets. Overnight on Wall Street, the S&P 500 dropped 0.7% and the Nasdaq Composite fell 1% as a surge in government bond yields weighed on ​equities.Asian markets also plunged on Wednesday, with South Korea’s Kospi crashing around 4% and Japan’s Nikkei tumbling 3%. Taiwan Weighted, Hong Kong’s Hang Seng and China’s Shanghai Composite fell around 1% each.5) Rupee fallsRupee opened 2 paise lower at 94.97 against the US dollar in early trade. This comes amid rising oil prices and US bond yields, threatening to pause the momentum the Indian currency has built with RBI’s intervention. “Going ahead, crude, dollar movement and FII flows will remain key triggers. Rupee range can be seen between 94.70–95.40,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.What lies ahead for Dalal Street?The deepening global bond rout, amid escalating West Asia tensions and bets that central banks will need to tighten monetary policy, has gripped investor sentiment in fear, said Vinod Nair, Head of Research at Geojit Investments. Tracking negative global cues, domestic equities saw volatile trade, with mid-caps bearing the brunt, he noted.Sectorally, while auto and IT stocks dragged markets down, gains in upstream oil & gas on realisation bets amid rising crude, alongside value buying in banking stocks, helped the market recover from its intraday lows, the analyst added.Technical view on NiftyFollowing a gap-down start, Nifty 50 recovered during the day, though it ended the session with a loss, said Rupak De, Senior Technical Analyst at LKP Securities. He noted that the benchmark index has broken down from a rising channel amid sustained selling pressure in the market. The weakness prevailed throughout the day, despite an intraday recovery. “The current bearish sentiment is likely to continue in the short term, and a sell-on-rise strategy may remain the preferred approach as long as the index remains below 24,000. On the lower end, the correction may extend towards 23,700–23,730,” according to the analyst.(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)