Kolkata: Indian stock market benchmark indices Sensex 30 and Nifty 50 fell sharply on April 25 after recording gains in the first few minutes after trading opened on Friday. While Nifty 50 was trading 341.15 points down (or 1.41%) and was at 23,905.55 points, Sensex was at 78,801.24 points, down by 1000.19 points (or 1.25%) a few minutes after 11 am.
Three possible reasons
Geo-political tension: One of the reason cited for the decline in the market indices was the regional geo political tension. After an all-party meeting on Thursday evening in which all opposition parties said they will stand by whatever strong action the Narendra Modi government decides on Pakistan following the Pahalgam terrorist attack, India woke up to reports of exchange of fire between Pakistani and Indian forces on Friday. New Delhi has already announced a suspension of the Indus water treaty, which can severely impact Pakistani agriculture and allied activities. Pakistan described it as an “act of war” and retaliated with firing across the border. Analysts said investors, in this situation, were not keen on taking long positions.
Volatility index rises: The Nifty VIX was up at 16.97, rising 0.72 points (or 4.42%) around 11:15 am. The Volatility Index is a gauge to measure the volatility as apprehended by the market in the near term. During times of market volatility, the market is seen to typically moves up or down, and the VIX tends to climb or fall accordingly. Reports stated that the VI index rose nearly 8% in the last five sessions.
Small and midcap space: That the markets were nervous was also exacerbated by the movement of the BSE Small cap Index and BSE Midcap Index. While the BSE Small cap Index was down by about 2.6%, the BSE Midcap fell about 2.3%. Analysts said the midcap and smallcap space could see more correction.
One of the large caps that attracted attention with a fall was Axis Bank. On Friday it was trading at Rs 1,149.90, down Rs 57.20 (or 4.74%). It helped drag down the indices. It is the third largest private bank in India and the decline followed a decline in January-March quarter profit.
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The Indian stock market surrendered early gains on Friday, April 25 and Sensex was trading more than 1000 points down a few minutes after 11 am. Analysts indicated that regional geo-political tension and earnings could have contributed to the decline. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
