Geopolitical Tensions Drive Sensex and Nifty Lower at Week’s Close

Indian benchmark equity indices closed Friday's session in the negative, under pressure from a sharp and sudden sell-off induced by rising diplomatic tensions between India and Pakistan. Although closing off their intraday lows, both the Sensex and Nifty declined, with the Sensex dropping below the 79,200 level and the Nifty closing around 24,000.

Intraday Volatility Sees Sharp Rebound but Ends in Red

The day of trading witnessed indices open on a positive note before reversing sharply on account of increased selling pressure. The Sensex dipped more than 1,000 points intraday to a low of 78,605.81 before rebounding more than 700 points to trade at 79,381.20 points by early afternoon. Likewise, the Nifty also fell below the 24,000 mark, touching an intraday low of 23,847.85 before gaining over 270 points to recapture the 24,000 mark and hold at 24,121.85 points during the afternoon. Nonetheless, the market eventually closed in red, with the Sensex falling 588.90 points (0.74%) to 79,212.53 and the Nifty falling 207 points (0.85%) to 24,039.35. The wider market capitalisation at the BSE decreased by ₹8.5 lakh crore to ₹421.13 lakh crore.

Reasons why the markets are falling today

Geopolitical Tensions with Pakistan Drive Market Unease: The most major driver for the market unease was increased tensions between Pakistan and India since the Pahalgam terror attack. Cries of ceasefire violations along the Line of Control (LoC) and strong responses from India, such as actions like cancelling the Indus water treaty, made investors fearful and cautious, especially before the weekend. This uncertainty was also seen in the sudden spike in the India Volatility Index (India VIX), a measure of investor fear, which jumped more than 5% today and rose 6% at one time, reflecting high levels of fear among market participants.

Small- and Mid-Caps Bear the Brunt of Broad-Based Selling: The weak sentiment was especially evident in the broader markets. Both the BSE Small cap Index and BSE Midcap Index saw deep cuts, declining by 2.6% and 2.3% respectively by afternoon. Earlier during the day, the BSE Small Cap Index declined more than 3% and the Midcap Index almost 2.5%. According to sources, small and midcap stocks have been badly pummeled in recent months, with some analysts opining that correction is still possible on account of stretched valuations. A market strategist pointed out that in a crisis, large caps are generally safer bets than small stocks, adding to selling pressure in small caps, particularly overvalued ones, and buying interest in large caps. Broad-based selling was witnessed across the market with far more stocks falling (2,322) than advancing (411) out of the 2,797 stocks that traded on the Nifty.

IT Sector the Lone Bright Spot Amid Widespread Declines

Sectoral performance presented a mostly dismal picture, with the majority of indices trading in the red. The Nifty IT index was the only sectoral index in the green, remaining steady at 1.21 per cent gain and subsequently reported as the only one in green. This industry was observed as the one which investors were turned towards as it is less affected with the increasing Indo-Pak tensions, with recent upbeat sentiment lift from HCL figures. Leading gainer IT data and information stocks were MphasiS, Persistent Systems, Tech Mahindra, Coforge, and Infosys.

Auto, Banking, Metal and Realty Stocks Under Pressure

Other industry groups were under severe pressure. Nifty Auto index slipped more than 1%, Media sector dipped by almost 3%, Metal dropped by 1.6%, and Realty slipped by 2.3%. The Nifty Bank index slid by 1.19%. Although the majority of banking shares fell, IndusInd Bank rose slightly by 0.33%, going against the downward trend. Axis Bank had the biggest fall among banking stocks at 4%. Other banking laggards were Punjab National Bank, Federal Bank, and Canara Bank (down 2-3%), and others such as AU Small Finance Bank, Bank of Baroda, IDFC First Bank, Kotak Bank, HDFC Bank, and ICICI Bank trading between 1-2% lower. The Nifty Metal index experienced a steep pullback, falling 2.46%, with almost all stocks well in the red. NMDC was a top laggard in this group, declining almost 5%. Hotel stocks also plummeted as tensions with Pakistan escalated, with leaders such as Indian Hotels, Lemon Tree, and EIH falling more than 5%, as geopolitical tensions are usually viewed as negative for tourism.

Sensex-30 Movers: Top Gainers and Biggest Losers

Among the individual Sensex 30 stocks, advancers were TCS (1.43%), Tech Mahindra (1.16%), Infosys (1.03%), UltraTech Cement (0.90%), and IndusInd Bank (0.33%) in the afternoon session. Previous advances had been observed in Infosys, TCS, and IndusInd Bank. Major losers were PowerGrid (-2.13%), Bajaj Finserv (-2.64%), Eternal (-2.92%), Axis Bank (-3.16%), and Adani Ports (-3.22%). Earlier reports also mentioned Axis Bank (falling by almost 2.7% and then 3.84%), Adani Ports (dropping by 4.04% and then 2.91%), Trent (falling by 4%), Bajaj Finserv (falling by 3.5% and then 2.78%), Bharat Electronics, Apollo Hospital, PowerGrid (later fell by 2.16%), NTPC (fell by 2.32%), and Tata Steel (fell by 1.70%) among big laggards. SBI Life insurance jumped sharply, up 6%, following Q4FY25 result announcement.

Current Market Update

• The Sensex is trading in red at 78,680.34 down by 1115.11 points or -1.40%.
• The NSE Nifty 50 is trading at 23,863.60, down -1.59%.

1. SBI Life Insurance (SBILIFE)

• Opening Price: ₹1,723.50
  
  
• Current Market Price (LTP): ₹1,672.20
  
  
• Percentage Change: +3.98%
  SBI Life Insurance shares surged by over 4%, emerging as one of the top gainers on the Nifty 50 index. The rally followed the company’s March quarter results, underscoring the insurer’s operational resilience and market leadership

2. Infosys (INFY)

• Opening Price: ₹1,475.50
  
  
• Current Market Price (LTP): ₹1,480.20
  
  
• Percentage Change: +0.60%
  Infosys shares experienced a slight uptick, potentially influenced by positive sentiment in the broader IT sector. Despite a year-to-date decline of approximately 25%, recent analyst reports have highlighted potential upside, citing expectations of improved client demand and strategic initiatives aimed at enhancing operational efficiency.

3. Tata Consultancy Services (TCS)

• Opening Price: ₹3,420.00
  
  
• Current Market Price (LTP): ₹3,411.00
  
  
• Percentage Change: +0.28%
  TCS shares registered a marginal gain, reflecting investor resilience despite recent challenges. The company's Q4 FY25 results indicated a 1.7% year-on-year decline in net profit, attributed to macroeconomic uncertainties and reduced discretionary spending in key markets. However, a 5.3% year-on-year increase in revenue and a proposed final dividend of ₹30 per share may have bolstered investor confidence.

4. IndusInd Bank (INDUSINDBK)

• Opening Price: ₹822.00
  
  
• Current Market Price (LTP): ₹820.00
  
  
• Percentage Change: +0.03%
  IndusInd Bank's stock remained relatively flat, with a slight positive movement. The bank recently issued a clarification denying reports of engaging EY for a forensic audit related to a ₹600 crore discrepancy in its microfinance portfolio. This clarification may have alleviated investor concerns, contributing to the stock's stability.

Top Losers of the Market

1. Axis Bank (AXISBANK)

• Opening Price: ₹1177.00
  
  
• Current Market Price (LTP): ₹1,151.80
  
  
• % Change: -4.58%
  Axis Bank's shares fell sharply following the release of its Q4 FY25 results, which revealed a marginal decline in net profit. The downturn was attributed to increased loan loss provisions and a decrease in trading income. Additionally, concerns about rising slippages and lower-than-industry-average loan growth contributed to investor apprehension

2. Bajaj Finserv (BAJAJFINSV)

• Opening Price: ₹2,105.00
  
  
• Current Market Price (LTP): ₹2,033.90
  
  
• % Change: -3.38%
  Bajaj Finserv's stock declined amid broader market weakness and profit booking by investors. 

3. Adani Enterprises Limited (ADANIENT)

• Opening Price: ₹2450.10
  
  
• Current Market Price (LTP): ₹2345.30
  
  
• % Change: -3.98%
  The primary reason for this decline is heightened investor caution ahead of the company’s upcoming Q4 results, scheduled for May 1, 2025. The broader market sentiment has also been subdued for Adani group stocks, with Adani Enterprises registering a 2.97% drop over the past week.

4. Adani Ports and Special Economic Zone Limited (ADANIPORTS)

• Opening Price: ₹1,236.30
  
  
• Current Market Price (LTP): ₹1,189.90
  
  
• % Change: -3.76%
  Adani Ports' shares declined due to profit booking by investors after a period of gains. The broader port industry also faced challenges, contributing to the stock's underperformance.

Market Open

The Indian market opened Friday in a cautious manner, making slender gains in line with mixed foreign cues and diplomatic tensions with Pakistan, with BSE Sensex rising 28.72 points (0.04%) to 79,830.15 and Nifty 50 by 42.30 points (0.17%) to reach 24,283.95 at the starting bell.

Factors Influencing Market Sentiment

• Overnight US Markets: Technology shares drove a Wall Street rally, with the Nasdaq Composite advancing 2.74% to just above 17,000. The S&P 500 rose 2.03%, crossing 5,480, and the Dow Jones Industrial Average increased 1.23% to cross above 40,000.

• Dollar Index: The US Dollar Index (DXY), which tracks the dollar against six major currencies, edged up 0.19% to 99.57 early Friday morning.

• Earnings to Watch on April 25: Reliance Industries, Maruti Suzuki and RBL Bank will all post quarterly numbers, along with updates from Tata Technologies, L&T Finance, Hindustan Zinc and Dr Lal PathLabs. Investors will also be looking at reports from Force Motors, Mahindra Lifespace Developers and Motilal Oswal Financial Services.

Global Backdrop:

• US Dollar: As of this morning, the US Dollar Index (DXY)—which compares the greenback against a group of six major currencies increased by 0.19% to 99.57. The measurement tracks the performance of the dollar against rivals such as the British Pound, Euro, Swedish Krona, Japanese Yen and Swiss Franc. Meanwhile, on the same day, the Indian rupee decreased 0.17%, settling at ₹85.26 against each US dollar on April 24.

• Gold Rate Today: Gold markets experienced a sharp surge, with spot prices rising by $47.16 (1.43%) to $3,335.50 an ounce. Investors flocked to the yellow metal as there were still questions over the US economic prospects and increasing geopolitical tensions. As per Goodreturns, 10 grams of 24-carat gold are selling at ₹98,230. The same quantity of 22-carat gold is selling at ₹90,040, and 10 grams of 18-carat gold are selling at ₹73,670.

• Crude Oil: Oil benchmarks recorded marginal gains on Friday morning: WTI crude was at $63.05, a rise of 0.40%, while Brent crude edged up by 0.35%, closing at $66.78.

Stocks in Focus:

• Axis Bank: Q4 net profit down ~0.2% to ₹7,115.7 cr; NII up 5.5% to ₹13,810.5 cr; gross NPA at 1.28%, net NPA at 0.33%.
• Tech Mahindra: Q4 net profit up ~76% to ₹1,167 cr; revenue +4% to ₹13,384 cr; EBIT ₹1,405 cr (margin 10.5%); won $798 m in new deals (₹2.7 bn for FY).
• L&T Technology Services: Q4 net profit down 3.5% to ₹311 cr; revenue +12.4% to ₹2,982 cr; EBIT margin 13.2%; final dividend ₹38/share.
• SBI Life Insurance: Q4 net profit +0.3% to ₹813.5 cr; net premium income –5% to ₹23,860.7 cr; net commission +17.2% to ₹997.8 cr.
• Adani Energy Solutions: Q4 net profit +79% to ₹647 cr.
• Macrotech Developers: Q4 consolidated profit +38% to ₹921.7 cr.
• Supreme Industries: Q4 net profit –17% to ₹293.94 cr; revenue +0.6% to ₹3,027 cr.
• Indian Energy Exchange (IEX): Q4 net profit +21% to ₹117.11 cr.
• Gensol Engineering: Promoters detained by ED under FEMA; premises searched over alleged financial irregularities.
• IndusInd Bank: Denied reports of halting new microfinance accounts; no RBI directive.
• BHEL: Fire at Bhopal plant contained immediately; no damage reported.
• Power Grid Corp (POWERGRID Energy Services): Commenced commercial operations of 85 MW solar plant in Ujjain, MP.
• Gujarat Industries Power: Commissioned Phase 1 of 75 MW captive solar project.

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