Mumbai, Feb 26 (IANS): The benchmark Sensex fell over 500 points on Tuesday after Pakistan claimed that Indian Air Force (IAF) fighter jets crossed the Line of Control (LoC) and returned after dropping a payload.

All the sectoral indices witnessed heavy selling pressure both on NSE and BSE.

"Indian markets have expectedly opened lower in the aftermath of the strikes," said Deepak Jasani, Head of HDFC Securities.

"Market participants are trying to interpret the actual damage and anticipate retaliatory action."

At 10.31 a.m., the Sensex traded 351.42 points or 0.97 per cent lower at 35,861.96 while the Nifty declined over 107.95 points at 10,772.15.

Jasani further added that worries over escalation in hostilities could keep a lid on the upside in the near term. Banks and metal companies are facing the brunt of the selling pressure in the morning session.

Official statements from both the sides and reactions of the global leaders are keenly awaited, he added.

Director General of Pakistan's Inter-Services Public Relations (ISPR) Asif Ghafoor confirmed in a tweet early Tuesday that the IAF planes dropped the payload near Balakot in Khyber Pakhtunkhwa before leaving in haste as the Pakistan Air Force (PAF) scrambled its war planes.