Sensex tanks 880 pts, Nifty slips below 24,050: 5 key triggers
Transcript
Hi, you're listening to ET Markets Radio. Welcome to a brand new episode of ET Market Watch. I am Neha Vashishth. Let's hear the top highlights.
Indian stock markets slid over 1% on Friday, as escalating geopolitical tensions between India and Pakistan weighed on investor sentiment.
The BSE Sensex dropped over 800 points, while the Nifty50 fell over 260 points.
Here are 5 things to know
1. Rising India-Pakistan Tensions
Pakistani forces launched drone and missile attacks along the western border, with blasts in Jammu targeting military sites. This follows the April 22 Pahalgam attack that killed 26 civilians. India responded with targeted cross-border strikes.
2) FII flows at risk
Foreign institutional investors, who had been net buyers for 16 straight sessions, pouring in over Rs 50,000 crore since April 15, may pause or reverse their strategy amid rising geopolitical uncertainty.
With the India-Pak tensions pushing up the India's geopolitical risk premium, the rupee also came under pressure. During any war-like scenario, investors usually flee toward safe-haven assets, causing capital outflows from the market and weakening the currency in the short term.
3) Broad-based sectoral sell-off and volatility spike
Selling was broad-based across major sectors. Nifty Bank, Financial Services, Auto, FMCG, IT, Pharma, Oil & Gas, and Realty indices fell up to 2.4%. Nifty Smallcap100 dropped 0.6%. India VIX, the volatility index, surged over 3% to 21.63, due to rising uncertainty.
4) Technical indicators
Nifty broke below its recent consolidation zone amid rising tensions but managed to hold above the 24,000 mark, taking support at the 21-day EMA. Analysts believe a sustained break below 23,900 could increase bearish pressure, while any rebound above 24,250 may help stabilise sentiment in the near term.
5) Index heavyweights drag markets
Top index constituents like ICICI Bank, HDFC Bank, Reliance Airtel, and ITC contributed nearly 780 points to the Sensex's overall decline. Their losses magnified the broader market fall, reflecting cautious investor positioning.
While the situation remains fluid, markets will likely remain volatile in the near term.
That's your market wrap—stay tuned for more on ET Markets.
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