Sensex Down 1,200 Points, Nifty Crashes Below 23,847.85; Know Key Reasons

The Indian benchmark indices are trading in red on Friday, April 25, falling over 1%, thereby extending losses for the second-consecutive day. The fall can be attributed to broad-based sectoral losses and heightened geopolitical tensions along the India-Pakistan Line of Control (LoC), following the ghastly terror attack in Pahalgam that killed 26 people.

The Sensex and Nifty opened with gains in the early trade today, April 25 on the back of continuous FPI outflows and a rally in global equity markets, but failed to maintain the momentum, thereby crashing further. BSE Sensex was down by 1,195.62 points or 1.5% at 78,605.81, while Nifty crashed by 398.85 points or 1.64 at 23,847.85.

Shares of Axis Bank, Adani Enterprises, Adani Ports and Special Economic Zone, Jio Financial Services, and Trent were the major laggards, cracking over 6% intraday.

Here are the key reasons behind the market's fall

1. Geopolitical tensions

Amid escalating tensions along the Line of Control (LoC), followed by retaliation from the Indian Army against Pakistani firing on Indian posts in Jammu and Kashmir on Thursday night, markets are reporting downward pressure. This comes after the deadly terror attack in Kashmir’s Pahalgam on April 22, which killed 26 people.

As per traders, market confidence is set to remain weak as India has suspended the Indus Waters treaty, while also downgrading diplomatic ties.

2. Poor Q4 earnings

Q4 earnings reports suggest that a stable earnings growth may remain doubtful. As per financial statements review, operating profits are set to decelerate for the March quarter amid sluggish sales and subdued demand.

3. Profit-booking session

Following a sudden rally in the past few sessions, investors booked profit on Friday, April 25. On Thursday, April 25, markets clocked a seven-day winning streak.

4. Slump in bank stocks

The Nifty Bank Index crashed by 1.6%. Shares of Axis Bank fell by over 3.5% after the company reported a decline in net profit to ₹7,117 crore, against ₹7,130 crore a year ago. 11 out of 12 stocks in the Nifty Bank ended in red.