Benchmark indices extended their losses for the second consecutive session on Friday, emerging as the worst performers among Asian equity markets, amid heightened geopolitical tensions and profit-booking.
After a firm start, the Sensex briefly crossed the 80,000 mark but soon came under intense selling pressure, slumping up to 1,200 points (1.5%) to hit an intraday low of 78,605.81. However, a partial recovery in the second half helped pare losses, and the index finally settled at 79,212.53, down 588.90 points or 0.74%. The Nifty also dropped nearly 400 points (1.64%) during the session to touch a low of 23,847.85, but ended above the 24,000 mark at 24,039.35, down 207.35 points or 0.86%.
“The Pahalgam terror attack triggered caution across Indian markets on Friday, with geopolitical tensions dragging sentiment into the red. A sharp intraday sell-off saw both indices decline significantly, reflecting investor unease over ceasefire violations and reports of cross-border firing along the Line of Control,” said Vikram Kasat, Head – Advisory, PL Capital.
“The heightened geopolitical uncertainty has led investors to adopt a risk-off approach, triggering profit-booking after the recent sharp rally. Furthermore, the markets appeared slightly overstretched following the vertical rise, prompting traders to reduce exposure,” added Ajit Mishra, SVP – Research, Religare Broking.
The overall market breadth was sharply negative, with 3,245 losers versus just 720 gainers on the BSE. The broader markets took a bigger hit, with the BSE Midcap indices and BSE Smallcap falling 2.44% and 2.56% respectively.
Investor wealth eroded by ₹8.05 lakh crore as the total BSE market capitalisation fell below the $5 trillion mark, standing at $4.93 trillion (₹421.6 lakh crore).
The India VIX index surged 5.58% to 17.16, indicating rising fear and potential volatility in the near term.
Barring IT, all sectoral indices on the BSE and NSE ended in the red. Services, utilities, realty, power, and telecom were the top laggards, falling up to 3.11% on the BSE.
Among Sensex stocks, Adani Ports, Axis Bank, Eternal (Zomato), Bajaj Finserv, and Power Grid were the top losers, declining up to 3.61%. On the other hand, IT majors like TCS, Infosys, and Tech Mahindra emerged as top gainers, rising up to 1.36%.
Among Asian equity markets, Japan, Taiwan, the Philippines, Thailand, Indonesia, and South Korea outperformed, rising up to 2.02%. Meanwhile, China and Singapore closed slightly lower, while Hong Kong posted marginal gains.
Surprisingly, despite the weakness, foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) were net buyers, with net purchases of ₹2,952.33 crore and ₹3,539.85 crore, respectively, according to provisional BSE data.
On a weekly basis, benchmark indices managed to close in the green. While the Sensex and Nifty rose up to 0.79%, the broader indices gained up to 1.31%.