The Indian stock market kicked off the day with a sense of optimism, but this positivity quickly evaporated, leading to a significant downturn. Investors were rattled by news of ceasefire breaches by Pakistan and escalating diplomatic tensions, which shifted the market from green to red within just an hour of trading. The recent Pahalgam terror attack and increased military activity along the Line of Control (LoC) sent ripples of uncertainty through Dalal Street.

As fears of a broader market correction grew, panic selling ensued, particularly among major index constituents. By the end of the trading session, both the Sensex and Nifty had closed lower, ending their recent upward momentum and wrapping up the week on a disappointing note.

Market Overview

• The Sensex concluded at 79,118.26, down 0.86%, while the Nifty settled at 24,039.35, experiencing a drop of 0.86% as well.
• The Nifty Bank index faced a significant setback, falling 0.97% to close at 54,664.05.
• Meanwhile, the India VIX, which measures market volatility, soared by 5.58%.

Investor Sentiment Shifts

“The heightened tensions along the Indo-Pak border have led to a more cautious investor outlook,” noted Vinod Nair, Head of Research at Geojit Investments Limited. “Mid- and small-cap stocks were notably impacted due to inflated valuations and rising fears of possible earnings downgrades amid a lukewarm earnings season. The potential for further market correction seems likely, prompting investors to adopt a watchful approach. However, for those with a long-term vision, now could present an opportune moment to invest given the Indian stock market’s resilience during geopolitical fluctuations.”

Key Highlights from Today’s Market Activity

• Intraday Indices Movement: The Sensex plummeted by over 1,100 points, reaching a low of 78,606, while the Nifty dropped nearly 400 points, dipping below the crucial 24,000 threshold to an intraday low of 23,848.

• Mid and Small-Cap Downturn: The sell-off extended to mid- and small-cap stocks, with the Nifty Midcap and Smallcap indices falling by 3% and 3.5%, respectively, reflecting a bearish broader market sentiment.

• Geopolitical Concerns: The market’s decline was largely influenced by reports of Pakistan violating ceasefire agreements along the LoC, shortly after it suspended the historic Simla Agreement. The Indian Army’s response heightened investor anxiety.

• Profit-Taking in Major Stocks: Leading companies such as Axis Bank, Adani Ports, Bajaj Finserv, SBI, Zomato, Tata Motors, M&M, HDFC Bank, Bharti Airtel, and L&T emerged as significant contributors to the market’s decline.

Sector Performance

All sectoral indices on the NSE closed in the negative. The PSU Banks led the decline with a drop of 2.24%, followed by Realty at -2.8%, Pharma at -2.24%, and Metal at -2.10%. The Auto and Bank Nifty sectors also saw declines of up to 2%.

Market Breadth

Out of 2,947 stocks traded on the NSE, only 455 managed to advance while a staggering 2,428 saw declines. A total of 146 stocks hit their lower circuit limits, with just 53 reaching the upper circuit.

Notable Performers

Despite the market slump, some stocks managed to stand out:

• SBI Life surged over 5% thanks to robust earnings.
• Other gainers included TCS (up 1.35%), Tech Mahindra, Infosys, Ultratech Cement, IndusInd Bank, HUL, Grasim, and ICICI Bank, all of which ended the day with gains.

Top Decliners

On the flip side, Shriram Finance suffered a significant decline of more than 8%, with Adani Enterprises falling nearly 4%. Other notable laggards included Adani Ports, Trent, Zomato, Axis Bank, and Apollo Hospitals, all experiencing drops between 3% and 4%.

As investors navigate these uncertain waters, the market’s resilience will be tested in the coming days.