Geopolitical fears, following the deadly Pahalgam terror attack, led to broad-based selling, particularly in mid- and small-cap stocks.
| Photo Credit:
iStockphoto
Markets experienced a sharp decline on Friday as heightened geopolitical tensions between India and Pakistan triggered a broad-based sell-off. The BSE Sensex closed 588.90 points or 0.74 per cent lower at 79,212.53, while the Nifty 50 index declined 207.35 points or 0.86 per cent to settle at 24,039.35.
Markets witnessed significant volatility, with the Sensex plunging to an intraday low of 78,605.81 and the Nifty touching 23,847.85 before recovering some ground in late afternoon trading. Most sectoral indices, except IT, ended in negative territory, with realty, healthcare, energy, and metals emerging as major laggards.
“Indian stock market experienced a significant downturn, with both the Sensex and Nifty indices declining sharply. Increased tension between India and Pakistan have heightened investors concerns,” said Bhavik Patel, Senior Research Analyst at Tradebulls Securities.
The tension follows the Pahalgam terror attack that claimed over 26 lives, after which India suspended the Indus Water Treaty, prompting Pakistan’s retaliation with reported skirmishes along the Line of Control.
Among the top gainers on NSE, SBI Life surged 5.15 per cent to close at ₹1,691, followed by Tech Mahindra gaining 1.02 per cent at ₹1,460. Other gainers included TCS up 0.95 per cent at ₹3,434, Infosys rising 0.58 per cent to ₹1,480, and UltraTech Cement advancing 0.25 per cent to ₹12,190.
The losers were led by Shriram Finance, which plummeted 8.13 per cent to ₹640, followed by Adani Enterprises dropping 3.95 per cent to ₹2,346. Adani Ports fell 3.79 per cent to ₹1,189.50, Trent declined 3.75 per cent to ₹5,124, and Eternal slid 3.67 per cent to ₹227.71.
The broader market faced even steeper declines, with the Nifty Next 50 falling 2.05 per cent, Nifty Financial Services dropping 2.41 per cent, and Nifty Bank sliding 0.97 per cent. The midcap segment was hit particularly hard with the Nifty Midcap 100 plunging 2.55 per cent.
Market breadth remained decisively negative with 3,245 stocks declining against just 717 advances on the BSE. A total of 58 stocks hit their 52-week highs, while 40 touched their 52-week lows. The number of stocks hitting lower circuits was 310, compared to 182 stocks reaching upper circuits.
“The broader market pain is even worse. Small- and mid-cap stocks have experienced more severe reductions of 2.6 per cent and 2.3 per cent respectively, since most of these stocks were already weak due to extended valuations,” noted Swapnil Aggarwal, Director at VSRK Capital.
Volatility spiked during the session, with the India VIX surging over 5 per cent on Friday. “The steep decline is largely fueled by increased geopolitical tensions… As firing is being reported at the border, investors have become risk-averse, particularly in anticipation of the weekend, wanting to stay out of long positions with such a cloudy situation,” Aggarwal added.
The rupee opened 8 paise stronger at ₹85.19 after closing at ₹85.27 against the US dollar on Thursday, showing resilience despite the equity market decline.
The IT sector stood out as the lone bright spot in an otherwise dismal session. Sundar Kewat, Technical and Derivatives Analyst at Ashika Institutional Equity, observed, “The Nifty opened at 24,289 but quickly witnessed a sharp decline, hitting an intraday low of 23,847. However, the index found support near the 23,900 mark and staged a recovery.”
Looking ahead, analysts anticipate continued volatility in the near term. “Nifty has slipped after a consolidation on the daily chart, indicating a rise in bearish sentiment. Additionally, the index has fallen below its 200-DMA, signaling a potential re-entry into a bearish trend,” warned Rupak De, Senior Technical Analyst at LKP Securities. He identified key support levels at 23,800 and 23,515.
Despite the current decline, some market participants see potential buying opportunities. “In this current falling scenario, the high-risk investors can consider the ‘buying the dip’ strategy to profit from the potential market gains,” suggested Ajay Garg, CEO of SMC Global Securities, noting that foreign institutional investors (FIIs) maintained a net buying position of ₹8,250 crores on Thursday.
Market observers will closely watch how geopolitical tensions develop over the weekend, with Palka Arora Chopra, Director at Master Capital Services, recommending, “Investors should keep a close watch on the upcoming earnings results and management commentary for demand trends, capex plans, and overall business outlook which will eventually shape the market’s trajectory going forward.”
Published on April 25, 2025
