A dramatic selloff sent shockwaves through Dalal Street on Friday, with the benchmark Sensex plummeting by nearly 1,000 points and the Nifty shedding over 300 points, as investors weighed the impact of fresh geopolitical tensions and disappointing earnings.
By mid-session, the S&P BSE Sensex had tumbled 928.26 points to 78,873.17, while the NSE Nifty50 dropped 302.90 points to 23,943.80 as of 12:31 PM today. This sharp correction came despite early gains driven by global market rallies and foreign fund inflows. The early optimism quickly evaporated as investors reacted to the escalating conflict between India and Pakistan following a brutal terror attack in Pahalgam, Kashmir, that left at least 26 civilians dead.
The tragedy, which unfolded in the picturesque tourist hub dubbed “Mini Switzerland,” has reignited cross-border tensions. Both countries have withdrawn diplomatic staff and suspended visa issuance, while exchanges of fire along the Line of Control have further fueled uncertainty.
Investors, spooked by the possibility of a protracted standoff, rushed to book profits after a prolonged market rally. As Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted, “Markets have been on a winning streak… rising from 22,000 to touch 24,400. There’s a tendency to book profits when tensions rise, especially in such uncertain geopolitical circumstances.”
This flight to safety was reflected in the India VIX index, which spiked 6.46%, a clear signal of heightened market anxiety. The carnage extended across all sectors—Nifty Midcap100 and Smallcap100 plunged 2.85% and 3.30%, respectively, with no sectoral index spared.
On the losing side, Axis Bank was the biggest casualty, dropping over 4% after reporting an underwhelming March quarter. The bank’s net profit slipped marginally from ₹7,130 crore last year to ₹7,117 crore, denting investor confidence. Bajaj Finance, Adani Ports, Bajaj Finserv, and Power Grid were among other heavyweights that saw steep declines.
Sectorally, Nifty Media led the decline with a 3.54% fall, followed by PSU Banks, Realty, Healthcare, Pharma, and Metals—all posting losses between 2.4% and 2.9%. Even typically defensive sectors like FMCG and IT were not spared. TCS and Infosys were among the few names in the green, inching up 0.70% and 0.67% respectively, alongside minor gains by Reliance, HDFC Bank, and IndusInd Bank.
Interestingly, while Indian equities bled, global markets painted a far rosier picture. US indices ended sharply higher overnight—Nasdaq surged 2.74%, S&P 500 gained over 2%, and the Dow climbed 1.23%. Asian bourses also remained buoyant, with South Korea’s Kospi, Tokyo’s Nikkei, and Hong Kong’s Hang Seng all registering gains.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed to the geopolitical uncertainty as a looming headwind: “Markets dislike uncertainty. The fear now is around what India’s response to the terror attack will be, and the ramifications that could have.”
In the near term, volatility is likely to remain elevated. Experts suggest caution for retail investors. “Unless you’re a long-term investor, it’s better to stay on cash. Use dips to enter selectively,” advised Bathini.
As tensions simmer and market sentiment remains fragile, all eyes are now on the government’s next move. The coming days could determine whether this is a short-term blip—or the start of a deeper correction.
