Stock Market Slumps as Sensex Tanks Nearly 1,200 Points Amid Broad-Based Selloff

Indian equity markets suffered a sharp decline on Friday, April 25, with the benchmark Sensex nosediving close to 1,200 points during the day despite mostly upbeat global cues. The Sensex kicked off the session at 79,830, slightly above Thursday’s close of 79,801, but quickly spiraled downward, hitting an intraday low of 78,606 — marking a plunge of nearly 1.5%.

The broader Nifty 50 index followed a similar trajectory, opening at 24,289 before tumbling almost 400 points (1.6%) to touch an intraday low of 23,848.

Mid and small-cap stocks bore the brunt of the selloff, with the BSE Midcap and Smallcap indices each sinking more than 3% during the session. Although markets recovered some ground by the close, losses were still significant.

This marks the second straight session of declines. The Sensex eventually ended the day down 589 points (0.74%) at 79,212.53, while the Nifty 50 closed 207 points lower (0.86%) at 24,039.35. Meanwhile, the BSE Midcap index ended down 2.44%, and the Smallcap index dropped 2.56%.

The market turmoil wiped out approximately ₹9 lakh crore in investor wealth in a single day, dragging the total market capitalization of BSE-listed companies from nearly ₹430 lakh crore to around ₹421 lakh crore.

What Triggered Today’s Market Rout?

Despite strength in other Asian markets like Japan’s Nikkei and Korea’s Kospi — both of which posted gains — Indian equities came under pressure due to several domestic and global concerns. Here are five key factors that weighed on investor sentiment:

1. Pahalgam Terror Attack Heightens Geopolitical Tensions

A terror attack in Pahalgam has escalated cross-border tensions between India and Pakistan. Prime Minister Modi’s strong response — promising to “identify, track and punish” those responsible — has fueled fears of potential escalation, which spooked investors.

“There's unease over how the situation with Pakistan might evolve,” said Pankaj Pandey, Head of Research at ICICI Securities. “While a full-blown conflict is unlikely, the uncertainty is enough to rattle markets.”

2. Profit-Taking After Recent Rally

Markets have been on a strong upward run recently, with indices gaining more than 8% over a few sessions. Analysts suggest today's drop is largely driven by investors locking in profits.

“After a seven-day winning streak, some pullback is expected,” said Kunal Kamble, Senior Technical Research Analyst at Bonanza Group. “This correction seems healthy given the recent gains.”

3. Global Economic Uncertainty Dampens Outlook

Despite India’s strong fundamentals, global headwinds — particularly concerns around trade dynamics — are starting to impact sentiment.

Both the World Bank and the IMF recently trimmed their FY26 growth forecasts for India to 6.3% and 6.2% respectively, down from earlier projections of 6.7% and 6.5%. These revisions come amid worries over slowing global demand and persistent geopolitical instability.

4. Muted Q4 Earnings and Cautious Outlook

The March quarter earnings season has so far delivered mixed results, with banking standing out as a strong performer. However, management commentary across sectors remains guarded, which has dampened optimism.

“Companies are cautious in their guidance amid macro uncertainties,” said analysts, “which isn't enough to sustain the recent momentum.”

5. Technical Resistance at Nifty’s 24,350 Level

From a technical standpoint, analysts flagged 24,350 as a key resistance level for the Nifty 50. A breakout above this threshold is needed to reignite bullish sentiment.

“Unless Nifty clears the 24,350–24,500 range, the upside remains capped,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “If the index drops below 24,200, we could see further intraday dips to 24,100 or even 24,000.”

Bonanza Group’s Kamble added that 23,800 is a crucial support level. If breached, it could signal deeper downside potential.

Despite the sharp pullback, many analysts view this as a correction within an overall uptrend. However, short-term volatility may persist given the current mix of geopolitical tensions and uncertain global cues.