Stock market today: Indian equity benchmark indices, BSE Sensex and Nifty50, crashed sharply in trade on Friday before recovering partially to close in red. While BSE Sensex dipped over 1,000 points intraday, Nifty50 went below 24,000. BSE Sensex closed the day at 79,212.53, down 589 points or 0.74%.Nifty50 ended at 24,039.35, down 207 points or 0.86%.
Indian benchmark equity indices declined in Friday’s trading session, reversing initial gains, as a terrorist attack on tourists in Kashmir created unease among investors and elevated geopolitical concerns.
Although the Government of India and Reserve Bank of India have implemented policies to stimulate economic growth, current geopolitical tensions and international trade challenges are restricting immediate positive outcomes. The fourth quarter earnings projections remain conservative, with analysts forecasting year-on-year EPS growth of 8%.
“The initiatives by the Government of India and the RBI are focused on reviving GDP growth momentum, but geopolitical tensions, trade protectionism, and sector-specific slowdowns are likely to limit the short-term benefits,” said InCred Equities.
Why stock market fell today
1) Rising India-Pakistan Tensions
The financial markets have turned cautious amidst growing tensions between India and Pakistan after the recent Pahalgam terror incident that resulted in 26 civilian casualties. The situation has been further complicated by India’s diplomatic downgrade and suspension of the Indus Water Treaty, leading to increased market uncertainty.
“Sentiment remains cautious as geopolitical tensions between India and Pakistan show signs of escalation after the Pahalgam terror attack,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, added “The potential headwind looming large on the horizon is the uncertainty regarding India’s response to the terror attack and its consequences,”
2) Market Rally and Valuation Issues
The Nifty index experienced significant growth, advancing 8.6% across seven consecutive trading sessions before encountering resistance on Thursday due to heightened geopolitical concerns. Despite maintaining a weekly gain of 1.7%, the substantial increase has triggered discussions about current market valuations, resulting in profit-taking activities and increased investor caution.
3) Banking Sector Performance Impact
Financial institutions significantly impacted the Sensex downturn, with Axis Bank, SBI, and Bajaj Finance leading the decline. Additional banking entities, including Kotak Bank, HDFC Bank, and ICICI Bank, registered negative performance. These institutions collectively contributed more than 360 points to the Sensex reduction.
Axis Bank emerged as the primary decliner within the Sensex composition, following its announcement of reduced profits for the March quarter, declining to Rs 7,117 crore from Rs 7,130 crore year-on-year.
4) Market Analysis
After seven successive days of upward movement, Nifty displayed signs of weakness on Thursday, coinciding with April’s monthly expiry. Analysis indicates an anticipated correction due to excessive buying conditions. The previous trading session produced a minor bearish indicator, suggesting uncertainty amongst traders.
“With a sharp rally already behind it, the index now appears to be entering a time-wise corrective phase. Broadly, the Nifty has carved out a defined range between 24,500 and 24,000, which could serve as a critical decision zone in the coming sessions,” said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.
5) Corporate Results Overview
The current results period has shown subdued performance, with numerous organisations reporting results below market expectations, influencing cautious market behaviour. Hindustan Unilever (HUL) achieved 2% revenue growth but failed to meet profit projections due to reduced urban consumption. Additionally, Axis Bank’s Q4 FY25 net profit decreased by 0.2% annually, affected by limited business expansion and reduced treasury earnings.
Technology companies encountered difficulties, as Infosys and Wipro presented conservative forecasts and modest revenues, resulting in reduced earnings projections for FY26 and FY27.
