India’s stock market witnessed a sharp downturn on Friday, April 25, with the benchmark Sensex plunging 1,075 points, or 1.35%, to an intraday low of 78,726. The Nifty 50 also fell sharply, dropping 368 points, or 1.5%, to hit 23,879 during intraday trade.
Despite favorable cues from global markets, a broad-based sell-off across sectors pulled domestic indices lower. The Sensex opened at 79,830, marginally higher than its previous close of 79,801, but then slipped lower. The Nifty 50 opened at 24,289, up from its previous close of 24,247.
The midcap and smallcap indexes were hit even harder, both falling over 3% during the session. The sell-off wiped out nearly ₹10 lakh crore of investor wealth, as the total market capitalization of BSE-listed firms fell from ₹430 lakh crore to ₹420 lakh crore.
What’s Behind the Market Rout?
Even as major Asian markets such as Japan’s Nikkei and South Korea’s Kospi ended on a high note, buoyed by gains in the Nasdaq and S&P 500, Indian markets bucked the trend. Here are the key reasons experts cite for the sudden downturn:
Geopolitical Tensions Following the Pahalgam Terror Attack A terror attack in Pahalgam has heightened geopolitical tensions between India and Pakistan. Prime Minister Narendra Modi has pledged to bring the perpetrators to justice, fueling market anxiety over potential escalation. Analysts suggest that while a broader conflict is unlikely, the uncertainty is enough to shake investor confidence.
Profit Booking After a strong rally, markets had recently rallied over 8%, prompting investors to book profits amid a lack of new catalysts. Experts suggest that this natural correction phase may lead to short-term consolidation in the domestic market.
Global Economic Concerns Weighing on Sentiment Although India’s fundamentals remain robust, persistent global uncertainty is dampening investor sentiment. A potential trade war, even with signs of easing from the US administration, still looms large. Recent moves by the World Bank and IMF to lower India’s growth forecasts to 6.3% and 6.2%, respectively, also reflect broader concerns about the global economic outlook. These revised forecasts are slightly below the RBI’s projection of 6.5% for FY26.
